Air Mauritius announced profits of EUR 5.7 million as compared to EUR 0.6 million for the corresponding period last year. The result is the best achieved in recent years notwithstanding a pay-out of EUR 8.3 million on hedging obligations contracted last year. Discounting hedging, Air Mauritius would have posted profits of EUR 14 million. Positive performance indicators throughout The number of seats offered increased by 4.5 % to 498, 943 whilst the number of passengers carried increased by 11.7% to 382,604. Turnover for the quarter reached EUR 131.1 million, representing a growth of 5.1 %. Load Factor improved by 6.1 percentage points to reach 80.4 % which clearly demonstrates a better utilization of seats deployed.

The slump in the Euro mitigates the impact of lower fuel prices The price of Crude Oil in the international market averaged at USD 56.2 a barrel for the Quarter against USD 107.9 for the corresponding period last year whilst the average EUR/USD exchange rate was at 1.11 against 1.33. The benefits of lower fuel prices were mitigated by the combined effects of a weak EURO and the hedge pay-out.

Improved First Half results

The good performance of the second Quarter has had a positive impact on the first semester results - losses reduced from EUR 6.4 million to EUR 4.2 million. This is one of the best first semester results achieved in recent years, confirming early signs of improvement observed as from the first quarter on all performance indicators including seat capacity, passengers carried, revenue and load factor. Even more improvements were, in fact, recorded on all these indicators for the Second Quarter as a result of initiatives taken by the company.

Intensifying competition

Air Mauritius has achieved this improved financial performance despite intensifying competition from airlines targeting the same tourist segments. Over the past two years, several airlines have started or intensified their activities in the Mauritius market, which resulted in a constant pressure on yield. Air Mauritius resisted and defended its market share by offering more value for money whilst judiciously managing costs.

Outlook

The operating environment will clearly remain challenging and will continue to be driven by volatile fuel prices and exchange rates. Competition will continue to intensify adding pressure on the company’s financial performance. Air Mauritius is continually adapting itself to these challenges. Its new operating paradigm is geared towards growth with the strengthening of regional operations and the development of Singapore as the main gateway to Asia. These

developments will tap into the demand for these products whilst giving a fresh impetus to the National Airline’s ambitions.