- The national carrier of Mauritius has announced that, while this year's profits have been record high, prospects for 2009 are bleak. Next year's profits may plummet by 75 percent due to high fuel prices.
Air Mauritius this year has blessed shareholders with record profits, amounting to euro 16 million in the fiscal year that ended in March. The 2007-08 result is far higher than last year's profit of euro 2.5 million and the significant loss of euro 13.9 million the year before.
"Air Mauritius is expecting to make an estimated profit of euro 16 million" this financial year, according to a press release from the airliner's board, released yesterday evening. Final accounts were to be submitted to the board for approval on 19 June.
However, further prospects are bleak, Air Mauritius reveals. "Under prevailing market conditions and current fuel prices the company is estimating that it will make a profit of around euro 4 million for the next financial year," the release reads. This represents a 75 percent decrease in profits for the upcoming year.
The Mauritian airliner has been expanding its services and airplane park during the last two years, after restructuring its ailing economy in 2006. With a new route to Bangalore, Air Mauritius is strengthening its customer basis beyond the traditional European tourism market.
Air Mauritius has seen increased competition on its lucrative routes connecting Europe and the Indian Ocean region; a traditional upmarket tourist destination where travellers have accepted high flight prices. With the arrival of cheaper alternatives, Air Mauritius needed to engage in cost-cutting programmes to be able to lower fares and reengage passengers.
Despite the increased customer basis, lower fares have made the airliner more exposed to hiking fuel prices, cutting the profit range. Most of the airliner's flights are long-distance, increasing risks as fuel prices keep rising.
On the positive side, the tourist flow to Mauritius shows no signs of cooling. The country has experienced a sustainable year-to-year growth in arrivals, averaging around 3-4 percent annually.
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