Despite considerable efforts to manage the legacy left by the management team appointed by Didier Robert in 2013 and since replaced, Air Austral still has a significant operating deficit. In 2023, €65 million was injected by its shareholders to support the airline. But this has not helped the airline to emerge from the crisis, and its situation remains fragile. This additional financial support of €6.75 million, approved by the elected representatives of Région Réunion, will be injected via SEMATRA, Air Austral’s public shareholder. A further €8 million will be provided by the private shareholder, RunAir, bringing the total aid to €15 million. The aim of this aid is to enable the airline to break even by 2025.

65 million injected by shareholders in 2023

This significant financial support is a step towards stabilising the situation. But it does not solve all Air Austral’s problems. Indeed, beyond this immediate aid, the company is still facing deep-seated structural difficulties.
The problems faced by Air Austral are not new. Previous articles published in ‘Témoignages’ have highlighted several aspects of this recurring crisis. The company is faced with particularly high operating costs, the result of the strategy of the former management at the helm when Didier Robert was President of the Réunion Region: the abandonment of the low-cost long-haul project taken over with great success by Air Caraïbes (French Bee), the sale of the Boeing 777-200-WR allowing non-stop flights between Mayotte and France and the acquisition of several Boeing 787s of dubious reliability have weighed heavily on the company. What’s more, these Boeing 787s cannot operate a direct non-stop flight between Mayotte and France, as a stopover in Nairobi is compulsory. The COVID-19 crisis was only a secondary explanation for a crisis caused by calamitous management: several hundred million in cash went up in smoke between 2013 and 2020 because of the political direction chosen by Didier Robert for Air Austral when he was President of the Réunion Region.

An uncertain future

Faced with this situation, the search for new financing and sustainable solutions is becoming urgent. The restructuring plan put in place by Air Austral’s management should make it possible to reduce costs. But there is still a long way to go before Air Austral can once again become the benchmark airline it was when it was managed by Gérard Éthève and chaired by Paul Vergès.
Air Austral continues to enjoy the unfailing support of La Reunion Island’s public authorities. They believe that Air Austral is a strategic player in the economic and tourism development of Réunion. The airline plays an essential role in opening up Réunion.
The injection of €15 million is a lifeline for Air Austral, but it is not enough to solve all the company’s structural problems. The coming months will be crucial in ensuring the long-term survival of La Réunion’s airline.

M.M.