Hedging and Difficulties at Air Mauritius

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1.0 INTRODUCTION

Strategic Management is an essential component in the view of completing the BA Honours in BUSINESS ENTERPRISE. The assignment will be dealing with the strategies and difficulties that exist at the Air Mauritius, the national airline of Mauritius.

To identify the root causes of the difficulties being faced at Air Mauritius, a strategic audit need to be carried out so possible strategic options could be proposed and utilised.

However, information has been obtained only from the website of Air Mauritius and from the daily and weekly local newspapers. Thus, all the gathered information is based purely on the website of the organisation and paper views from Mauritius.

1. AIMS AND OBJECTIVES OF THE PROJECT

The aim of this assignment is to identify the main causes affecting Air Mauritius. Thus, different areas need to be explored so as to find out what are the problems and how can they be tackled. As a result, four areas have been identified, which will be discussed and analysed.

Four objectives have been designed to achieve the objectives and outcomes, which are the following, ← To appreciate the nature of the changing business environment through the identification of the scope and purpose of the business in the case. To evaluate the need for a mission/vision for the business with reference to stakeholders. ← Through the application of appropriate skills and techniques to analyse the internal environment of the business in order to identify key strengths and weaknesses. ← Through the application of appropriate skills and techniques to analyse the external environment of the business in order to identify opportunities and threats. ← To appraise existing strategies, identify and evaluate future possible strategies and recommend a course of action. To identify the difficulties of strategic implementation.

As the report progresses the above four areas will be developed, answered and analysed in depth. Thus, it will give a clear overview of the different aspects and characteristics of the organisation. In addition, the root causes will be highlighted and possible solutions will be proposed.

1.2 AN OVERVIEW OF AIR MAURITIUS
Nestled in the south east of Mauritius Island, Air Mauritius represents the national airline company, ensuring the incoming and outgoing of Mauritians and tourists simultaneously. Nowadays, it is a transformed airline company from what it was when it was first founded in 1967. Air Mauritius Ltd was formed on June 14, 1967, as a ground handling agent for other airlines. Mauritius was then a colony of the United Kingdom; it became an independent state within the Commonwealth in March 1968. The economy of the island was dependent on the sugar industry. The government owned 42.5 percent of the company when it was formed; other shareholders were shipping company Rogers & Co. (17.5 percent), British Airways and Air France (15 percent each), and Air-India (10 percent). In 1972, Air Mauritius began its own flight operations with a single, six-seat Piper Navajo leased from Air Madagascar. The first island-hopping flights were to neighbouring Reunion and Rodrigues. The next year, Air Mauritius launched a Mauritius-Nairobi-London flight with a Vickers Super VC 10 aircraft leased from British Airways. The airline took the phaeton rubicola or Paille-en-Queue, a fish-eating tropical bird, for its symbol. Communications minister Harry Tirvengadum joined the airline in 1972 and became managing director in 1978, a position he held for nearly two decades. In 1984, Air Mauritius began operating nonstop service flying Boeing 747 jumbo jets to major European cities including London, Paris, and Rome. In April 1987, Air Mauritius began leasing two Boeing 747s for use on long routes, including one to Munich. It also ordered two Boeing 767 airliners worth $130 million. As the network expanded to the east, Air...
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