Air Mauritius (MK, Mauritius) has announced that its state-owned parent Airport Holding Ltd (AHL) converted a shareholders' loan of MUR8.05 billion Mauritian rupees (USD176 million) into equity, providing the airline with "a firm and binding commitment for financial support as and when required".

In a statement on March 31, the airline said it had "taken the necessary measures to improve its efficiency and performance and is expecting positive results for 2025/26".

It also reassured "all stakeholders, including passengers, that there has never been any question of shutting down the national airline".

As previously reported, AHL provided the loan to Air Mauritius in 2022. On March 14, the airline's chairman Kishore Beegoo, who took on the role in January, highlighted the carrier's dire financial situation, with accumulated losses of EUR317 million euros (USD343 million) between March 2000 and March 2024 and a shareholder equity deficit of EUR195 million/MUR9.6 billion (USD210 million).

He attributed this to a decade of mismanagement including poor strategic decisions such as leaving the loan from AHL as debt for two years instead of converting it to equity earlier. This delay, he explained, hurt the airline's credit profile. However, by February 2025 the loan was finally converted into equity, enabling the finalisation of Air Mauritius’ delayed 2024 financials.

According to Le Défi Media in Mauritius, the MUR8 billion debt was converted into non-voting convertible and redeemable preference shares (NCRPS). This helped Air Mauritius emerge from technical insolvency.

Beegoo said the airline was working with the government to raise an additional MUR2 billion (USD44 million) to improve its financial situation. One option being considered is further shareholder support. Additionally, he added, around MUR1.2 billion (USD26 million) in unflown ticket sales could also be used to improve the airline's situation.

Beegoo aims to implement a budget plan to streamline operations and recover MUR2 billion within a year. The goal is to return Air Mauritius to profitability by 2026.