Air Austral (UU, St. Denis de la Réunion) has taken delivery of its first of three A220-300s on order from Airbus (AIB, Toulouse Blagnac) as part of its fleet renewal plan.

F-OLAV (msn 55106) was handed over to the Indian Ocean-based carrier at Montréal Mirabel on July 27. The trio of jets, of which the remaining two will deliver “in the coming days”, will feature 132 seats with 12 in premium and 120 in economy. Collectively, they will replace Air Austral's existing fleet of two B737-800s (leased from Aircastle and Blackbird Capital) and one ATR72-500 (leased from Falko Regional Aircraft) which will be withdrawn from large-scale rotation as the A220s are phased in. As such, the ATR is due to exit the fleet in October this year while the B737s' departure will be resolved in the coming months.

In the immediate future, Air Austral said in a statement it would deploy the A220s on flights between La Réunion and Dzaoudzi, and then between La Reunion and Mauritius. With the lifting of health restrictions, it will then target Madagascar, Seychelles, Comoros, India, and South Africa.

The purchase is backed by the Réunionaise regional government, which, in March, agreed to guarantee a EUR54,477,533 (USD64.48 million) loan which the airline, via its Air Austral Jet DAC and Air Austral A220 entities, had taken out from Export Development Canada (EDC). According to the terms of the committal, the loan will be guaranteed up to 50%, i.e. to a maximum amount of EUR27,238,766.50 (USD32.24 million) over ten years with an interest rate of 2.74% per annum. In return, Air Austral will be asked for an annual remuneration of 0.5% calculated on the amount remaining to be guaranteed by the regional government.

Air Austral aims to reduce fleet complexity and, therefore, overall operating costs. With the Boeing narrowbodies and the Avions de Transport Régional turboprop gone, its overall fleet will encompass three A220s, two B787-8s, and three B777-300(ER)s.

The French Indian Ocean possession controls 73.5% of the semi-public company Sematra which, in turn, owns 99% of Air Austral's capital.