The supervisory board of Air Austral (UU, St. Denis de la Réunion) approved a restructuring plan presented by the airline's management at a meeting on March 7, according to a statement from the carrier.
The plan includes cutting payroll by 10% , reducing supplier expenses and reorganising government debt. The airline will also try to "positively resolve" ongoing financial disputes, while routes and frequencies have been reviewed with a focus on profitability and yield management.
"Efforts will also be required from staff resulting in a significant reduction in the cost of payroll, as well as from suppliers and the State, particularly in the delicate management of the treatment of public liabilities," Réunion's West Observer outlet cites the company saying. Air Austral reportedly employs 845 people and has annual payroll expenses of EUR78 million euros (USD85.2 million).
In support of this plan, which is intended to be "ambitious, rigorous, and focused on the future of the company", the public and private shareholders collectively agreed to back the company with a financial contribution of EUR10 million (USD10.9 million), the statement said.
In October 2023, ch-aviation reported Chairman Joseph Brema as saying that the beleaguered carrier was progressing toward profitability. He said the airline's senior management had two objectives - profitability and completing a restructuring. Approved by the Commercial Court of Saint-Denis in Réunion on January 25, 2023, the latter included a capital restructuring and a new money contribution, in addition to reworking Air Austral's debt, including the write-off of a portion granted by various public and private creditors. This followed the December 2022 signing of a conciliation protocol by the carrier, the French state as its controlling shareholder, various public creditors, banking partners, and new investors.
According to ch-aviation PRO airlines data, Air Austral flies to 17 destinations in 10 countries with a fleet of three A220-300s, one (wet-leased) ATR72-600, one B737-800, three B777-300ERs, and two B787-8s. Recently, it said it would be temporarily scaling back its A220 operations and network with two of its three regional jets out-of-service due to Pratt & Whitney engine issues.
