The delivery of Air Austral’s first two A220-300s has been postponed pending the finalisation of financial guarantees, the airline says.

In a statement, Reunion’s flag carrier said the decision was taken in consultation with Airbus to give the airline time to finalise the jets' financing.

This followed after the carrier's financial partner, Canadian export credit agency Export Development Canada (EDC), in December 2020, had required additional guarantees from the French State, the Réunion Regional Council, and major shareholder, Sematra, for the acquisition, in light of the impact of COVID-19 on the airline. The airline’s turnover fell by 55%, and its revenue dropped by EUR100 million (USD118.9 million) since March 2020 due to Covid-19 linked travel restrictions.

“In recent days, the Air Austral teams have made every effort to bring the positions closer, but some points require more time,” the airline said. “In consultation with Airbus, the general management, therefore, took the decision to postpone the delivery of these two aircraft in order to give us time to properly finalise the financing.”

As previously reported, Air Austral planned to debut the A220-300s in early 2021 on regional routes.

Air Austral and Airbus in Réunion on October 12, 2019, signed a firm purchase order for three A220-300s, making it the first customer in the Indian Ocean region for Airbus’ newest aircraft type purpose-built for the 100-150 seat market. It was also the first time that Air Austral had ordered Airbus aircraft. The A220-300s were to be delivered between November 2020 and March 2021, featuring 132 seats in a two-class configuration. They are supposed to replace the airline’s two B737-800s and single ATR72-500.

French finance and economic minister Bruno Le Maire earlier this month said France would guarantee a EUR30 million (USD35.6 million) loan to Sematra to help Air Austral, with an additional EUR5 million loan having been secured from the Caisse des Dépôts et Consignation, a French public sector financial institution.

Air Austral in 2020 already benefited from European Commission-approved aid of EUR120 million (USD142.8 million) in state-guaranteed loans of EUR30 million (USD35.6 million), plus shareholder and bank loans totalling EUR90 million (USD107 million).