Air Madagascar Completes the Sale of Two Airbus A340s

Air Madagascar has finalized the sale of its two Airbus A340-300 aircraft to a Chinese buyer. This transaction represents a key step in the airline’s ongoing efforts to stabilize its financial situation and move forward with its restructuring plans.

Key Details of the Sale

• Two aircraft sold: 5R-EAA (MSN 319) and TF-EAB (MSN 210)
• Age of aircraft: 25 and 27 years, respectively
• Sold for $2 million (€1.93 million)
• Both aircraft are being scrapped

Financial Context and A340 History

This sale is a significant move for Air Madagascar as it continues to grapple with mounting financial challenges. The airline’s total debt is estimated at $100 million, with 60% of that owed to the Malagasy government. The proceeds from the sale will go toward reducing this debt. Additionally, these two aircraft had been incurring ongoing maintenance costs without generating any revenue, further straining the airline’s financial resources.

The A340s were originally acquired by Air Madagascar through a lease-to-own agreement with Air France between 2012 and 2013. At the time, the airline sought to resume European operations after its Boeing 767 fleet faced EU flight restrictions in 2011. However, the deal quickly became complicated due to significant financial issues, including unpaid lease payments totalling $46 million and an outstanding balance of $55 million. Legal disputes over ownership rights added further complexity to the situation.

Looking Ahead: The Path to Recovery

In 2022, Air Madagascar and Tsaradia merged to form Madagascar Airlines, which is currently executing a broad recovery plan. Under the “Phoenix 2030” strategy, valued at $67 million, the airline has secured $25 million in funding from the World Bank. Madagascar Airlines aims to achieve operational profitability by the end of 2025. The company received its permanent Air Operator Certificate (AOC) in April 2023, marking a significant step in its journey toward operational efficiency and financial stability.

The sale of the A340s represents the end of a challenging chapter for Air Madagascar. As the airline continues to navigate its financial restructuring, this move is part of a broader effort to secure a more sustainable and profitable future.