February 25, 2020: Air Austral and Air Madagascar partnership agreement, which is in place since 2017, is facing challenges as the Reunion Island-based carrier enters into a new phase of negotiations to reduce their 49 percent shareholding.

It is now being said that the partnership between Air Austral and Air Madagascar, which started in 2017, is fast heading to a breakdown.

Air Austral paid an initial capital injection of 15 million euros for its equity share, but the second agreed payment of 25 million euros to Air Madagascar has not been disbursed as expected.

The plan laid out that at least $40 million to be injected into Air Madagascar by Air Austral to provide additional working capital.

The airline operates scheduled services from Reunion Island to metropolitan France, South Africa, Thailand, and India, as well as a number of destinations in the Indian Ocean.

Air Madagascar is the national airline of Madagascar operating services to Europe, Asia, and neighbouring African and Indian Ocean island destinations. Its main base is located at Ivato International Airport in Antananarivo. The airline also operates an extensive domestic network.

The Madagascar government has injected an undisclosed sum of money into the national airline in November 2019 allowing the airline to continue operations. The government of Madagascar efforts to find a strategic investor has failed until now.

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