‘Air Seychelles recovery historic’ |19 March 2013

The recovery of Air Seychelles that has helped it make US $1m profit in one year after making losses for three consecutive years is historic.
The airline’s chairman Joel Morgan and its chief executive Cramer Ball said this yesterday, noting the positive result comes just 12 months after Etihad Airways got a 40 per cent stake in the airline and was awarded a five-year management contract.

Mr Ball told Nation there have been “significant synergies and cost savings from the equity partnership with Etihad, and the airline carried 247,750 passengers on its domestic and international network during the last nine months and has introduced 19 new codeshares, the most recent being with Airberlin.

Air Seychelles has expanded its international network and has launched new flights to Abu Dhabi and will start flying to Hong Kong on March 24, he said.
He said direct flights to Europe would not be as economically viable as the ones the airline makes through the new agreement, noting the number of tourists from the continent has increased.

Mr Ball said even with the arrival of the airline’s new Airbus A330-200, Air Seychelles will continue to lease smaller aircraft from Etihad for the Mauritius route because they are better-suited for the short haul trip.

In a press release, the airline quotes Mr Morgan as saying:
“The choice of Etihad Airways as a strategic partner has been the right one. Working with our new partner, we have had to make some hard decisions to turn the airline around.  We are now seeing the successful results of our strategy.

“To record a profit after the immense challenges we faced a year ago is an incredible achievement. I am proud of the enormous progress Air Seychelles has made. The recovery of Air Seychelles is a new chapter not only in our airline’s history – but our nation’s.  I am confident we have now laid the ground work for sustainable profitability and our brightly-coloured aircraft will cheer the skies for years to come.”

Mr Ball said: “In the first instance, this meant looking at the cost-base, and then stripping down the business right across the airline’s operations to find the right shape and size for our national carrier.

“We introduced strict fiscal control in parallel with business process re-engineering to make our operation more efficient. We are a very different business today.”
He attributed this success to leveraging the economies of scale and synergies arising from the equity alliance with shareholder Etihad Airways.

The airline said this entailed renegotiating of contracts for catering, ground handling and in-flight entertainment, and the conclusion of joint contracts for fuel, uniforms and stationery supplies, all of which improved service and significantly reduced costs.

“Our first focus was on a new network plan which could support the hugely important tourist sector in Seychelles more effectively with good connections and broader choice for visitors to the archipelago.”

“We are going to continue to build our capacity with a second A330-200, allowing us to start flights to Hong Kong to capture the lucrative Asian leisure market in March 2013. We will also be increasing the frequency of flights to Abu Dhabi, Johannesburg and Mauritius.”