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A small Mauritian airline company flew its last commercial flight on Wednesday, highlighting what critics see as a possible government intention to curb the firms of European descendants.

Catovair, owned by conglomerate IBL, said it was closing its single, loss-making service to the outer island of Rodrigues because the government had not given it permission to expand into other more profitable routes.

«There is a bit of the Mauritian government which is very critical of the large companies run by Mauritians of European origin,» Francis Soler, editor in chief of the Indian Ocean Newsletter, said in relation to the Catovair case. «There is a trend to contain these groups.»

The Indian Ocean nation of 1.3 million people is still coming to terms with a history of European sugar plantations, African slaves, and indentured Indian labor.

The government says its policy of «democratization» will even the economic playing field, much of which is controlled by European-descended families through firms like IBL or Rogers.

Officials were not available on Wednesday to comment specifically on the Catovair case.

The key beneficiary of Catovair's indefinite closure is likely to be Air Mauritius - almost 40 percent government owned - which now has a monopoly on flights to Rodrigues.

In March, Mauritian conglomerate Rogers closed its iron-bar manufacturing company, Desbro, saying the government's rigid price controls were not letting it keep up with the rising costs of raw materials.

A forthcoming competition bill to curb monopoly power may also hit the larger businesses.

«The private sector is not just IBL or Rogers,» Cader Sayed-Hossen, president of the government's commission for economic democratization, said in a recent interview.

«It's also the thousands of small operators who have taken risks and hope that their investments will bear fruit... We are defending business freedom.»

With a population of 38,000, the hilly island of Rodrigues -- some 350 miles (560km) north-east of the Mauritian mainland -- views tourism as a lucrative alternative to small-scale fishing and agriculture.

Small businesses on Rodrigues said the closure of Catovair would hit them hard.

«Rodrigues is a victim of the situation,» said Annecie Larose, heading an association of some thirty guest-houses on the tiny island. «We just want the chance to develop.»

(Reuters)