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Madagascar: Will Air France Jet Purchases Really Help Air Madagascar?

[All links lead to French language pages, except when otherwise noted]

The year 2011 saw Air Madagascar being banned from flying to European destinations due to the airline failing to comply with security regulations. In order to ensure the continuity of their services, Air Madagascar was forced to ask Air Italy to take on the flights that they could no longer operate.

The transition government in Madagascar had been celebrating the recent purchase of two Air France Airbus A340s with great fanfare, yet multiple questions have since been raised over the suitability, financial arrangements and terms of the purchase. The long term sustainability of the airline itself has also ultimately been called into question.

Problems on takeoff  

Air Madagascar is the only commercial airline in the country. Historically, international flights have been made by Boeing aircraft.

While this change of supplier may seem trivial, in effect it requires a long period of re-training for Malagasy pilots, and means that for the moment, only Air France pilots are qualified to fly the planes bought by Air Madagascar.

In this video, President Andry Rajoelina is presented with the Airbus in Toulouse:

The planes themselves have also had trying times: the second Airbus A340 has already broken down twice. These technical problems have done nothing to reassure passengers, whose confidence in the company is low after concerns over safety that lead to the company being blacklisted.

Isabelle Blanco explains the technical faults on Air Journal:

la presse relève que les deux pannes concernaient le train d’atterrissage, une pièce « vitale ». Officiellement, la première était due à une panne du détecteur d’incendie. A Paris, c’est le système de verrouillage du train d’atterrissage qui a fait défaut : le train est sorti, mais un voyant s’est allumé, ce qui poussé les équipes techniques a effectué une vérification, qui a duré trois heures. Quoiqu’il en soit, les Malgaches semblent rester sceptiques sur le choix de la compagnie de voler en Airbus, alors que qu’elle n’a jamais opéré que des Boeing. Il faudra donc encore du temps à Air Madagascar pour retrouver une confiance perdue

it has appeared in the press that the two faults affected the landing gear, a vital component. Officially, the first was due to a fire sensor. In Paris, it was the landing gear locking system which failed: the gear descended as planned but a warning light came on. This necessitated a check by the engineering crew, which lasted three hours. In any case, Malagasies [people from Madagascar] seem to be skeptical about Air Madagascar's choice to go with Airbus when they have always flown Boeings in the past. The airline is going to need more time to regain that lost confidence
President Andry Rajoelina with the Air Madagascar Airbus 340. Photo: Tananews.

President Andry Rajoelina with the Air Madagascar Airbus 340. Photo: Marie Audran-RFI with permission

Like the majority of the world's airlines, the company has been through some difficult times in the last few years. The Airbus planes are on loan to Air Madagascar for a period of six years, at the end of which the company becomes the sole owner. AD has some further details on the transaction:

Le contrat de location vente avec Air France a été conclu pour six ans. Le premier A340 est loué 350 000 dollars par mois, le second 475 000 dollars. Air France possède dans sa flotte 15 A340 300 avec lesquels elle dessert notamment la ligne Paris-Antananarivo quatre fois par semaine. Le premier A340 300 cédé aux Malgaches a 14 ans. Le second, 12 ans.

The lease with Air France was agreed for six years. The first A340 is leased at 350,000 [US] dollars per month, and the second at 475,000 [US] dollars. Air France's fleet has 15 A340 300s which currently serve the the Paris-Antananarivo route four times per week. The first A340 300 bought by the airline is 14 years old, the second 12 years old.

The running costs will remain high for Air Madagascar due to the addition of the costs of using Air France flight crews while the company's own pilots receive training on the Airbus planes. The salaries of the Air France pilots are considerably higher than those of the Air Madagascar pilots.

Many experts have questioned the choice of Airbus. Mahefa Rakotomalala explains:

 L'A 340-300 souffre de nombreuses critiques par rapport surtout à son concurrent direct, le Boeing 777, l'autre choix possible qui a fait hésiter longuement la partie malgache. La marque américaine est meilleure sur plusieurs points. D'abord, en termes de ventes car sur 377 A 340 vendus en 20 ans chez 48 compagnies, il y a 1295 triples 7 achetés par 64 compagnies. Pour deux appareils de même capacité, la consommation en carburant du premier a pesé lourd sur le choix des transporteurs aériens. A la fin de l'année 2011, face à ces constats, Airbus a décidé de mettre fin à la construction de l'A 340, même si le service après vente est encore maintenu pour 30 ans (..) Ajouté à cela, il y a une restructuration nécessaire pour accueillir ce nouveau type d'appareil dans la flotte d'Air Madagascar : formation des membres d'équipage, réorganisation du département maintenance et industriel ainsi que toute la chaîne logistique sont autant de changements qui ont certainement des coûts.

The A340-300 has numerous disadvantages when compared to the Boeing 777, the aircraft in direct competition which made the Malagasies hesitate over their choice for some time. The American marque wins in several categories, particularly in sales where 1295 777s have been bought by 64 airlines in the last 20 years compared to 377 A340s by 48 airlines. The fuel consumption of the A340 heavily influenced the airlines’ decisions, given that both planes have the same capacity. In the face of these findings, Airbus decided to cease production of the A340 at the end of 2011, despite after-sales support continuing for another 30 years (..) In addition to this, Air Madagascar will need to restructure in order to welcome this new type of aircraft into its fleet: crew training, reorganization of the maintenance and industrial department, as well as the supply chain are all changes which will definitely accumulate costs.

The shadow of Françafrique

It seems that the purchase of these aeroplanes was made to benefit Air France, which is also in the middle of serious financial difficulties. The antiquated and fuel-thirsty Airbus planes sold to Air Madagascar were no longer of any use to Air France (in fact, these four-engined planes are consume so much fuel that to keep them in service would be far too costly for Air France.)

The question therefore presents itself: if these aircraft are too expensive for Air France to run, how can Air Madagascar possibly afford to run and maintain them?

Madonline asks if these Airbus planes represented the best choice for the country, or for the directors of the airline:

 Officiellement, le choix pour l’avionneur français n’est pas politique, mais commercial, d’une compagnie à une autre. La compagnie aérienne malgache est dirigée par des responsables politiques et administratifs de la HAT, en particulier issus du ministère des Finances. Ce qui n’exclut pas qu’elle ait réalisé une relative bonne affaire. Qui est le grand patron de la Compagnie Air Madagascar ? C’est Hery Rajaonarimampianina, le ministre des Finances et grand argentier de la HAT qui est accessoirement président du Conseil d’Administration de la compagnie aérienne nationale. L’homme y siège avec quelques-uns de ses fidèles lieutenants qui sont eux aussi de grands responsables dans la gestion des finances de l’Etat. (..) Le Conseil d’Administration d’Air Madagascar continue d’argumenter pour faire oublier le caractère politique de la préférence à l’avionneur français. (..) Air Madagascar a-t-elle réalisé une bonne affaire en achetant les deux appareils de 12 ans et 14 ans dans le cadre d’une vente location de 6 ans. Un appareil Airbus A340-300 neuf peut coûter 150 millions de dollars. Les deux appareils seront loués 369 000 dollars et 403 000 dollars mensuels, ce qui donne moins de 60 millions de dollars pour le plus cher. Les critiques fusaient, car la valeur vénale des appareils en questions a été estimée à environ 30 millions de dollars.

Officially, the choice of the French manufacturer is a commercial one between two companies, and not political. The Malagasy airline is run by politicians and administrators from the HAT (transition government), mostly from the Ministry of Finance, which in itself does not preclude them from making a relatively good deal. Who is the man at the top of Air Madagascar? It is Hery Rajaonarimampianina, Minster of Finance, the man who holds the purse strings for the HAT and who is also president of the board of directors of the national airline. He holds his position there backed by numerous loyal lieutenants who are also very influential in the finances of the state.(..) The board of directors of Air Madagascar continues to argue that the political dimension of the choice of the French manufacturer should be forgotten. Has Air Madagascar made a good deal by buying two aircraft of 12 and 14 years old after a lease of 6 years. A new Airbus A340 300 can cost 150 million [US] dollars. The two craft are being leased at 369,000 and 403,000 [US] dollars per month, which makes the most expensive Airbus just under 60 million [US] dollars. This provoked a raft of criticism, given the estimated market value of the planes is estimated at 30 million [US] dollars.

In these time of economic crisis for the majority of airlines,many observers are beginning to ask if Air Madagascar will remain solvent for much longer. Afrique Infos says:

D'après les observateurs, l'acquisition de ces Airbus marque déjà la fin de la compagnie nationale Air Madagascar dont le personnel de bord tant les pilotes que les commerciaux ont déjà acquis les repères de la firme américain Boeing (..) Air France a déjà abandonné ces avions car ils sont chers à exploiter et en contrepartie, Air Madagascar a donné ses potentiels dont sur tout l'axe Europe-Océan Indien qui est très prisé par les touristes européens (..) En ce qui concerne la consommation, ces quadriréacteurs, contrairement à l'explication du directeur général de la compagnie, ne sont pas très économes en terme de kérosène, et c'est l'une des raisons pour laquelle, Airbus a décidé de mettre fin à la construction de l'A340 (..) un employé de Air Madagascar a expliqué que les compagnies préfèrent acheter le Boeing 777 qui a la même capacité que l'A340, et en 20 ans, le premier a vendu 1295 avions alors que le second est de 377 pour ce problème de consommation de carburant.

According to commentators, the acquisition of these aircraft marks the end of Air Madagascar, whose cabin crew, pilots and salespeople are all fully trained to the standards of American firm Boeing (..) Air France has already abandoned these aircraft due to the high running costs and in conjunction Air Madagascar has given up its claim to the Europe-Indian Ocean routes, which are heavily used by European tourists (..) In terms of kerosene consumption, these four-engined planes are not economical . This is contra to the claims of the company chairman, and one of the reasons why Airbus has decided to stop producing the A340 (..) an employee of Air Madagascar explained that airlines prefer to buy the Boeing 777, which has the same capacity as the A340, for this reason. In 20 years, the Boeing has sold 1295 compared to 377 A340s because of this fuel consumption issue.
Thumbnail and featured image shows Air Madagascar seat covers, by Flickr user S@veOurSm:)e (CC BY-SA 2.0).

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