BrazilAir Mauritius calls in Grant Thornton for restructuring
Air Mauritius has become the latest victim of the ongoing crisis in the aviation sector, entering voluntary administration to avoid going bankrupt. Grant Thornton has been flown in to manage the restructuring process.
The airline industry has suffered from a dearth of revenue brought about by the Covid-19-related travel restrictions across the globe since the start of this year. Similar issues have plagued airlines globally, in what the International Air Transport Association (IATA) has described as “the worst crisis ever since World War II.”
Air Mauritius was already struggling with its finances last year, prompting the board to set up a Transformation Steering Committee to tackle various issues, including currency fluctuations, competition and fuel price volatility. The committee was tasked with developing a business model to navigate these challenges, due to be presented in April, but was faced with a whole new set of challenges in the new year.
To avoid bankruptcy, the airline has now gone into voluntary administration, with Grant Thornton called in to support the restructuring process. CEO of Grant Thornton Mauritius Sattar Hajee Abdoula has been brought on board, alongside Senior Advisory Manager at Grant Thornton Mauritius Avind Gokhool.
The duo aims to keep the airline operational, pointing to its significance for the Mauritius economy. “As administrators, our mission is above all to save the company. We know that the national airline is a key player in our economy and that it is part and parcel of our history,” they said in a statement.
“Air Mauritius is, in addition, a source of pride for the people of Mauritius, and there is no doubt that we are all affected by this news. In such difficult times, it is essential that we get down to work without delay, along with all the partners of this industry in Mauritius, to implement the measures deemed necessary to save the national airline,” they added.
Flying into administration
Grant Thornton joins advisors across the globe working on salvation cases in the airline sector. In Europe, German airline Lufthansa brought Boston Consulting Group (BCG) on board last month to help implement a business rescue plan, while Virgin Australia hired Deloitte for voluntary administration back in April.
Virgin Atlantic also brought Alvarez & Marsal on board to oversee the insolvency of its UK practice last month. Meanwhile, the world’s second oldest airline – Bogotá-based Avianca – has now filed for protection in New York after being thrown into financial trouble from the Covid-19 crisis.
Although economies are now starting to open up, a report from US-based ICF suggests that it might take four years at the very least for the global aviation sector to recover from the Covid-19 crisis.
