New Delhi, April 23 (IANS) Business disruption caused by the Covid-19 pandemic led Air Mauritius' Board of Directors to place the company under voluntary administration on Wednesday as the airline is expected to default on its financial obligations in the foreseeable future.
The Board took the decision to place the airline under voluntary administration in order to safeguard the interests of the company and that of all its stakeholders.
This move will initiate voluntary bankruptcy proceedings on the airline.
“Unfortunately, travel restrictions and the closure of borders in all our markets and cessation of all international and domestic flights in an unprecedented crisis has led to a complete erosion of the Company's revenue base,” a communique from the airline said.
“Furthermore, there is uncertainty as to when international air traffic will resume and all indications tend to show that normal activities will not pick up until late 2020.
“In these circumstances, it is expected that the company will not be able to meet its financial obligations in the foreseeable future,” it added.
Global airline association IATA has estimated that some 25 million jobs in the sector and its related value-chains, including the tourism industry, are at risk in the wake of the current crisis.
Passenger revenues are expected to be $314 billion below 2019 (-55 per cent) and airlines will burn through about $61 billion in liquidity in the second quarter alone as demand plummets by 80 per cent or more, IATA had said.