Air Seychelles Reports First Profit in Three Years

Air Seychelles, the national airline of the Republic of Seychelles, has reported a net profit of US$1 million for the 2012 financial year. The profit follows three years of significant losses.

The positive result comes just 12 months after Etihad Airways acquired a 40% stake in the airline and was awarded a five year management contract.

The Chairman of Air Seychelles, Joel Morgan, said the past year had been focused on reshaping the business of the iconic Indian Ocean airline for success.

“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,” Mr. Morgan said. “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.”

Chief Executive Officer of Air Seychelles, Cramer Ball, said the airline had achieved a profit by “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.

This entailed the renegotiation of contracts for catering, ground handling and inflight 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.”

To optimise the schedule and enhance connectivity with its partner airlines, the Air Seychelles’ network was expanded through 19 codeshare destinations with Etihad Airways, opening up key European markets, and with the introduction of four flights a week to Abu Dhabi.

The network expansion was made possible by renewed investment in the fleet. During the year, the airline introduced an Airbus A330-200 and wet-leased an Etihad Airways’ Airbus A320 on the Mauritius route.

“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,” Mr Ball said.

A recently announced codeshare with airberlin will expand the island carrier’s network throughout Europe.

Network development was accompanied by investment in product and service enhancements.

“We have responded to the demand from our affluent leisure and tourism guests by introducing a new international inflight product and can now offer a business class experience to rival any airline. Air Seychelles offers on demand dining in business class and is the only airline to offer a lie-flat business class seat flying into Seychelles,” Mr Ball said. 

Established in 1978, Air Seychelles now has more than 200 domestic flights a week and a strong domestic charter business. The airline employs 550 people, 25% of whom have worked with the company for more than 15 years. 40% of the staff have worked at Air Seychelles for 10 years or more.

“Our partnership with Etihad Airways has made us a bigger player in the global aviation scene and we are better able to withstand the uncertainties and volatility in the global economy. In addition to our natural organic growth, in 2013 we’re looking to broaden our network through partnerships. Now we need to maintain our strategic focus and effort,” Mr Ball said.