Air Madagascar has signed a memorandum of understanding (MOU) to create a strategic partnership with Reunion-based Air Austral, under a deal which is expected to be finalized by May 31.

Air Austral, which is already partnered with Air Madagascar through the Vanilla Alliance, was selected as Air Madagascar’s preferred partner in March after beating off a rival bid from Star Alliance carrier Ethiopian Airlines.

In an update released April 4, Air Madagascar said the Madagascan finance and transport ministers have now signed an MOU with Air Austral CEO Marie-Joseph Malé.

“This is an important step towards a final agreement. We hope that this long-term partnership will return the company to stability and help Air Madagascar regain its position at the center of national, regional and international aviation development. The business plan proposed by Air Austral will allow us to develop commercial relationships with major international companies,” Air Madagascar chairman Léon Rajaobelina said.

Air Austral’s Malé said the agreement signaled a turning point for the two companies, although he added there are several more steps yet to clear.

More than 30 companies were interested in a strategic partnership with Air Madagascar, although only seven of these were pre-qualified to submit an offer.

Air Austral and Ethiopian Airlines were both invited to more detailed talks, but Air Madagascar’s board decided to recommend Air Austral to the Madagascan government as the preferred bidder.

Victoria Moores victoria.moores@penton.com