Is the Vanilla Alliance in jeopardy

Air Austral, the flag carrier of the French department of Réunion, and Corsair, a French airline located in Paris, have commenced discussions to reach an agreement on a commercial partnership arrangement for their flights between France and the Indian Ocean, according to reports. Is it possible that the Vanilla Alliance’s regional cooperation in the area may suffer as a result of this development?

By collaborating on a commercial level, the two airlines want to provide a more robust flight schedule with better connections, using their combined networks.

They think they will be able to provide a more competitive pricing structure as well as a better freight service as a result of this.

“This large-scale project will benefit passengers while also improving the economic profitability of operations through the pooling of resources and the maximisation of synergies,” said Pascal de Izaguirre, chairman and CEO of Corsair. “This large-scale project will benefit passengers while also improving the economic profitability of operations,” he added.

While both sides claim that this present proposal would protect the identity and independence of both airlines, several political and labor leaders are concerned that this commercial relationship could eventually lead to a complete merger between them.

In the midst of the epidemic, both firms are also coping with Air France’s development plan into France’s abroad departments and territories.

Air Austral has already been forced to seek more resources as a result of these difficulties. To round up the fiscal year 2020-2021, the corporation reported net loss in the amount of €76 million ($85,66 million).

“We negotiated government financing in 2020, but the restoration to a positive balance sheet will not occur until the fiscal year 2021-2022,” said Marie Joseph Malé, the company’s chief executive officer.

In spite of the fact that Corsair was already in a precarious financial position prior to the Covid-19 crisis, the company was rescued thanks to an infusion of cash from new shareholders, as well as €150 million ($169.07 million) in state assistance and additional subsidies to finance aircraft purchases.

France has already placed Air France, Air Austral, and Corsair on support packages, so how probable is it that a complete merger will take place while the commercial connection is in progress?

The subject remains open, but with additional negative business pressures working on the Vanilla Alliance airlines operating in the Indian Ocean, the survival of the alliance must be in some doubt.

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