The champagne is out. There might be nine more days to go before Air Mauritius closes its financial year but its executives are already celebrating. The national airline has been flying high over the past months, carrying a record number of passengers and gaining impressive market shares on most routes. No wonder the Paille-en-Queue?s pockets are now bulging.

Air Mauritius has yet to release exact figures but it is now clear that both profits and turnover are on the up. While some experts predict Air Mauritius will make record profits this year, insiders say the results will be far better than last year. In 2003-2004, net profits amounted to 13.5 million euros.

?Over the past year, we have worked hard to bring our operational costs down while increasing revenues. The financial results show that we have been spot on?, says Megh Pillay, the managing director of Air Mauritius.

The national airline has been rationalising its network, cutting off unprofitable routes like Brussels and Vienna to focus on lucrative ones such as London. It has also entered in code-share agreements with German carrier LTU and Austrian airline Lauda Air. Such deals will allow Air Mauritius to have a foothold in these countries without incurring huge expenses as its aircraft and crew won?t be used.

Even before the official figures are out, the airline?s results have impressed the industry. Airlines in general have not had an easy ride over the past year. Soaring oil prices have caused a permanent headache. Air Mauritius has mitigated the impact by hedging jet fuel price risks and imposing a fuel surcharge. The national airline consumes 80 million gallons of fuel annually.

No increase in dividends

Despite cashing in big time, Air Mauritius is not in a generous mood. At the end of an eight-hour long board meeting, directors have agreed to pay dividends of Rs 1.50 per share ? exactly as last year. Shareholders will not be over the moon, but Air Mauritius justifies its decision:?We have to strengthen our cashflow before we embark on our fleet renewal programme. Whether we lease or buy new aircraft, we will need to make cash deposits?, says Megh Pillay.

Last Thurday?s full board studied detailed plans of the fleet renewal exercise. The evaluation committee explained how the different aircraft and their financing options compared. Five proposals have been retained. Air Mauritius is keen to implement innovative solutions, which would enable it to have access to new aircraft only in the short term before it can lay its hands on revolutionary ones, which will roll out of Toulouse and Seattle by 2010.

?We are only interested in getting the best aircraft that suit our specific needs and also the best deals?, says Megh Pillay. So far, his management team has been delivering its promises. The next months will not be short of challenges. The board has already slipped into gear. Air Mauritius fleet will soon sport a new livery. The Paille-en-Queue will certainly have a new image - but will keep up its fighting spirit as well.

AML gets sole boss

The battle is over at the airport. Philip Cash will be named chief executive officer at Airports of Mauritius (AML). The backers of the new Rs 1.2 billion airport extension have convinced the government that two heads are not better than one in such a strategic company. Hence, Vijay Poonoosamy has been demoted to the post of chairman. He has lost his executive functions but gained the chairmanship of a newly formed company, the Air Navigation Services Provider (ANSP). The latter will take on the commercial activities of the Department of Civil Aviation, namely the Area Control Centre (ACC), which is a real cash cow. The ANSP could pave the way to the privatisation of the ACC ? a potentially explosive issue.