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Why, and how, India plans to help cash-strapped Air Mauritius
Mauritius holds strategic importance for India due to its geographic position along key maritime routes in the Western Indian Ocean Region. Moreover, geopolitical interest in Mauritius has grown amid intensifying competition with China read more
The Indian government has encouraged domestic airlines to consider investing in Air Mauritius, the financially troubled national carrier of Mauritius, which is grappling with negative equity of approximately $237 million (Rs 2,035 crore), according to officials familiar with the matter.
The request from India's Ministry of External Affairs follows an appeal by Mauritius for strategic investments and additional flights by Indian carriers to its capital, Port Louis. Air Mauritius recently reduced flights to India substantially, cutting its twice-weekly Delhi service down to a single weekly flight and raising fares significantly in a bid to curb losses, Economic Times reported.
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Airport Holdings Limited (AHL), a company owned by the Mauritian government, holds a 99 per cent stake in Air Mauritius. As part of efforts to stabilize the airline financially, AHL recently converted around Rs 1,500 crore of debt into equity. Mauritius Prime Minister Navin Ramgoolam acknowledged earlier this year that Air Mauritius was technically insolvent, casting doubt on its viability.
Indian airline executives expressed reservations about investing in Air Mauritius, citing limited passenger demand from the region and their ongoing internal expansion initiatives. Neither India's Ministry of Civil Aviation nor Air Mauritius responded to requests for comment on the potential investment.
Strategic importance
Mauritius holds strategic importance for India due to its geographic position along key maritime routes in the Western Indian Ocean Region. Prime Minister Narendra Modi, who was chief guest at Mauritius' National Day celebrations this year, emphasised the importance of Indian investment for Mauritius' economic development. India also recently built an airstrip and jetty on Mauritius' Agaléga island.
Previously, Air India held around an 8 per cent stake in Air Mauritius until Air India's privatisation in 2022.
Geopolitical interest in Mauritius has grown amid intensifying competition with China. Beijing maintains a military base in Djibouti and has increased engagement across the region, including Mauritius. Samir Bhattacharya, an associate fellow at the Observer Research Foundation, highlighted India's intention to maintain its influence against China in the region, emphasizing diplomatic and commercial connections.
Although Mauritius is well positioned to attract transit passengers between Africa and Asia, rising competition from airlines like Emirates and Indian carriers Air India and IndiGo has complicated Air Mauritius' efforts to establish itself as a profitable transit hub.
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