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Air Mauritius braces itself for tough times
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Air Mauritius braces itself for tough times
The national airline is aware of the challenges ahead: rising oil prices, more competition. The only way of riding out an eventual crisis is to cut costs. This will probably be Megh Pillay’s main message, as general manager of Air Mauritius, when he hands over to Nirvan Veerasamy next month.
Oil represents 26% of its annual expenses. No need to say, in such circumstances, that a drop in that item would be great relief for Air Mauritius. Last year, it placed half of its oil needs under hedging. The company intends to continue in the same way while trying to save on energy. The renewal of the fleet, due in 2006, will also help. In the long run, the homogeneity of the fleet will bring costs further down.
But oil is not the only major expense and Air Mauritius will strive to cut costs as much as possible. Electronic tickets – directly sold over the Internet – will bypass intermediaries such as travel agencies. Of course, it is out of question of erasing agencies from the scene but direct sales in many cases will certainly help Air Mauritius in its cost-cutting strategy.
Electronic ticketing with secure payment</B>
The company is already thinking of proposing cheaper tickets to its customers in some cases. Last-minute tickets or, on the contrary, bought long before the departure date should cost far less with electronic ticketing and secure payment over the Internet.
This will certainly help Air Mauritius in its fight to remain competitive. “We have to constantly adapt our business model to remain connected with our customers’ needs,” Megh Pillay explains. In that perspective, the airline will also review its image: new uniforms, new cabins in all aircrafts and an eventual new design for its logo. The traditional “paille-en-queue” could well be discarded.
The outgoing manager is conscious that Air Mauritius will not be able to rest on its laurels and continue business as usual. The new management will have to show a strong will and think out of the box to keep the airline competitive. The record profits made under Megh Pillay’s leadership last year will certainly not be enough to ride new dangers. Ticket prices are cons-tantly decreasing because of rising competition at national and international level as well as consumers’ pressure on value for money.
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