From the kitchen with love

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If the two events which took place at Air Mauritius (MK) this week are a coincidence, it is a very happy one. Almost a conspiracy. First, we learnt that Mike Seetaramadoo, a chap very close to the centre of power, has gone back to his normal activities within Air Mauritius. A new disciplinary committee our lips are sealed about decided that he was innocent of all the accusations against him and he walked free. In fact, Seetaramadoo now has additional responsibilities within the human resources department. A very happy and highly expected ending.

For those who may have forgotten, it is perhaps apt to remind you that the former CEO, Megh Pillay, who insisted on having Seetaramadoo face the first disciplinary committee – due to serious allegations around his recruitment including falsifying his work experience – was dismissed as a result in very outrageous circumstances and in such haste that the disciplinary committee was cancelled in the nick of time. A few resignations of lawyers later, Seetaramadoo got his post back with a promotion as a bonus!

As he was easing back into his position, with the blessing of a spineless board – not a word about any of the appalling decisions – the headlines were, instead, grabbed by another event at MK: the announcement of the great financial results. Rs1.1 billion (€28.7 million) in profits! The chairman of the board, Arjoon Suddhoo, was quick to use all the platforms available to him to beat his chest about this ‘record profit for the first time in the history of Air Mauritius’ due to ‘team work, a management which believes in itself and structures put in place by the board’! Wow! Congratulations! Record profits! For the first time in the history of MK! Nothing short of magic!

What Suddhoo forgot to tell us is this: The chief item of expenditure is jet fuel. Here’s a little reminder of the price of fuel: If in 2013 and 2014, the barrel of oil cost $108.8 and $99.9 respectively, it went down to $53.9 in 2015 and $44.6 in 2016! MK therefore spent €174.7 million on jet fuel in 2014/15 as opposed to only €142.3 million in the last financial year reported at the AGM in July 2016.

The difference of €32.4 million is huge! Even at today's rate of about Rs38 to the euro, this constitutes a saving of Rs1.23 billion under this item of expenditure alone! In other words, the saving is more than the whole profit being brandished as historic!

Worse, in spite of the last hedging tapering off and MK saving Rs1.23 billion in fuel expenses, the company continued to pocket the fuel levy that was introduced when oil prices were high and which should have been waived as soon as the price of barrel plummeted! Do the math.

Naturally, the great management of MK – meaning the kitchen club – did not use the opportunity to develop a strategy or invest the unexpected manna in view of the rainy days which are bound to come. Nor did it have the courage to cut costs or interfere with the legendary overstaffing of MK. In fact, the crew costs and other operating costs went up by €3.3 million (Rs124 million)!

Instead of bragging, maybe Suddhoo and his lot should have shown a bit more humility. We wouldn’t then have had to remind them that kitchen politics do not lead to the progress of any company. Not in the long run! No, Sir!

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