News Analysis: Air Madagascar's decision to halt direct flight to China "disastrous" for Madagascar

The decision by Air Madagascar to suspend direct flight from the country's capital Antananarivo to China's Guangzhou could lead to "disastrous" impacts for Madagascar, analysts have said.

The Antananarivo-Bangkok-Guangzhou line was inaugurated in 2009 and suspended on Jan. 7, 2016 due to a loss in the company's cash flow, the Air Madagascar said.

"The flight to Asia has recorded a loss for Air Madagascar because the fill rate is only 50 percent and revenue cannot cover the leasing of aircraft, rental of registration number of Air Madagascar in Europe, insurance and fuel prices," Dominique Raharinaivo, communication officer of Air Madagascar, told Xinhua.

"This is not a good decision from Air Madagascar because many countries find currently that there is a lot of interest in China and these countries have opened direct line to China," Haingo Rasolofonjoa, Executive Director of Chinese African General Association (CAGA), told Xinhua.

"Air Madagascar certainly evokes a cash flow to sacrifice this direct flight linking China-Madagascar, but it will give benefits to its competitors. Because other companies as Air Mauritius, Kenya Airways and Turkish Airlines will take this line," Rasolofonjoa said.

"It is anti-economic and even anti market," said Sylvain Liu, Owner of MADAVERTE, a travel Agency in Madagascar's capital.

"Air Mauritius in five years, from 2010 to 2015 has tripled its frequency, the volume of their flights to China," Liu added, comparing Air Madagascar to its competitors.

Sylvain Liu explained that "thanks to the increase of frequencies of Air Mauritius direct flight to China, the number of Chinese tourists who visited Maurice exceeded 100,000, while in 2010, they were only 14,000."

"As an economic observer, I think it is a strategic mistake to suspend this flight because China is unsurpassed besides its potential," Rasolofonjoa said, adding that "Air Madagascar Company should look for other solutions to this financial loss."

Sylvain Liu, as a member of the Association of Travel Agencies of Madagascar (AACM), argued that "there is need to review certain measures to improve management in the company."

"It is not a problem of filling because the plane is often seen completely filled in 90 percent and where it was visible from all sides," he added.

"The type of aircraft Airbus A343, which is the most expensive in terms of fixed costs and fuels, but remember that there are other companies as Air Mauritius that have the same type of aircraft with such frequency of flights to China," said Sylvain Liu.

"In October and November, we already had a lot of booking for the traditional spring holiday in February, but following the suspension of the flight Antananarivo- Bangkok-Guangzhou, already a forty people finally had to give up their plan to go to Madagascar," Liu complained.

"Only for the Spring Festival, there are nearly 20 million Chinese traveling abroad, one percent of which (around 200,000) go to Africa, traveling during spring break, usually between 10 days to two weeks," Liu said.

However, Madagascar could become the leading destination for South East Africa and is already among the 10 top countries in favor of African destination after Egypt, Kenya and South Africa, said Sylvain Liu, who sells Madagascar destination to Chinese customers since ten years.

"According to our estimation, Madagascar has the potential to receive more than 50,000 Chinese tourists per year, if transportation and infrastructure are improved," he said.

Modeste Randria, a Malagasy expert in economy, said "the opening of this line in 2009 was nevertheless one of the factors that promoted trade between the two countries."

He added that negative impacts are many including the drop of trade between the two countries, without forgetting that China is the second partner of Madagascar in terms of trade".

"This will decrease also the entrance of foreign currency to Madagascar, the image of the country tarnished in China because it marks the immaturity of decision makers in the country," Randria said.

"I do not know other strategic reasons besides the shortfall, but most of leaders of Air Madagascar have relationships with Westerners who may have interests in the suspension of the direct flight between Madagascar and China. This however requires more investigation," the expert disclosed.

According to information from Air Madagascar, "the company is studying until March 31, 2016 how to solve its cash flow problem and see if direct flight to China will resume or not." Endit