Air Mauritius: Hundreds of Jobs at Risk

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Air Mauritius is at risk of losing more than a third of its employees. The national carrier is reportedly excessively manpowered, with an average of 244 employees per aircraft compared to the international average for similar companies of 150 employees per aircraft. With 2300 employees, the excess is over 1000.

Despite government support to the national carrier and vital sectors to restart economic and industrial activities, Air Mauritius is facing an abyssal financial problem. According to several sources, Air Mauritius expects to report a loss of MUR 9.5 billion Mauritian rupees (USD 238 million) for the current financial year, ending 2021. Vincent Chappard and Anuradha Deenapanray report. Salary cuts have already been implemented but the situation remains distessing.

Air Mauritius was placed under voluntary administration on 22 April 2020 in wake of the COVID-19 pandemic.

Directors have until January 31, 2022 to let go of employees or adopt the contracts of all Air Mauritius employees and also to hold the meeting of creditors under section 237 of the Insolvency Act. It is also mentioned that before informing the Redundancy Board, discussions between the administrators and representatives of the staff unions leading in most cases to salary cuts, took place. But given the airline’s financial situation, these wage cuts are not enough, leaving them with no choice but to cut down on staff.

 

Labour productivity in an airline business can be assessed. The available tonne-kms (ATK) per employee is the common and traditional measure. It is not the number of employees in the company or number of employees per aircraft per se which is of critical importance. It is the employee costs as a ratio to what output they generate which matters. It does not matter critically if the company is overstaffed as compared with a similar one in a high wage economy (Europe, Japan, USA, Singapore) and if it offers comparatively lower salaries on a purchasing power parity basis. One has to carry out the input/output ratio analysis.

Prior to the pandemic, Air Mauritius was already in trouble. In late January 2009, Air Mauritius secured a EUR40 million commercial loan with a government guarantee, to pay bills and meet day to day running costs. This fell short of the EUR50 million sought by the airline. This is a far cry from the days when it was consistently ranked as the best performing carrier in Africa.

Planes vary enormously in size and seating capacity. Some are convenient for long haul operations (the A380s, 747s, 777s or A350s), some for medium haul flights and some for short sectors and very quick turn-round flights such as to La Réunion and back. When thinking about sector lengths, frequencies or distance travelled, it becomes clear that the notion of ratio of employees per aircraft is a very rudimentary measure and that surely more sophisticated measurements of optimum staffing or employee productivity within an airline operator are possible. This is why there is benchmarking in the industry to know the unit cost of labour and its contribution to output. It is then noted that the output is multi-dimensional as in a service industry being looked at delighting the customer as well as operating within a regulatory straight-jacket such as flight duty limitations, landing and take-off recencies and so on.

Air Mauritius has a fleet of 9 aircraft including 4 Airbus A350 XWB, 3 Airbus A330s, and 2 ATR Turbo props. The airline also operates two Bell 206 Jet Ranger helicopters that are used for tour services.

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