A revised business plan introduced by the new senior management team at Air Seychelles following an investment in the carrier from Abu Dhabi-based Etihad Airways is showing positive signs and the airline is on track to report a full year profit, a significant turnaround after several years of heavy losses. The UAE carrier took a 40 per cent shareholding in Air Seychelles in January 2012 and has a five-year management contract.
Speaking to The HUB at World Routes in Abu Dhabi, Cramer Ball, Chief Executive Officer of Air Seychelles, outlined aspects of the airline’s restructuring programme which has been an integral part of the turnaround plan at the Indian Ocean carrier (watch our exclusive video here). For the third quarter of 2012, Air Seychelles has posted third quarter revenues of $13.8 million, up 23 per cent on the second quarter. This strong performance was led by a 51 per cent quarter-on-quarter increase in passengers, up from 53,066 to 79,887, as seat factors rose from 43 per cent to 60 per cent.
“The scale of the task in turning around this company has been significant. There is a fantastic business here based on enthusiastic and committed people, but it needed a more effective commercial focus. Working together, we have been able to bring that new focus to bear,” said Cramer Ball.
“In this quarter, we have started to see the results. We are not just attracting more passengers but we are seeing higher yields on all our routes. Our costs are falling quickly, as new efficiencies come into play, and we are now running ahead of budget in our cost-cutting program,” he added.
According to Cramer Ball, the positive impact of cooperation with shareholders Etihad Airways and the Seychelles Government was really starting to be felt. Flights to Abu Dhabi have increased to four per week, with onward destinations rising from 57 to 375 per week through Etihad connections, opening up hundreds of new markets for quick and easy connectivity to the Seychelles. “As we add capacity back into our fleet and build up network connectivity, we are setting the foundations for long term, sustainable profitability, giving the Seychelles the national airline it deserves,” he said.
The number of domestic passengers carried over the last three months also surged, up 30 per cent to 43,949 compared to the previous quarter. This included 17,215 residents flying locally with the airline, an increase of 27 per cent, while the number of international visitors on domestic routes jumped by 32 per cent to 26,734. These increases were supported by a 14 per cent increase in domestic flights with 3,283 domestic flights to Praslin, Bird Island, Denis Island, Fregate Island and D'Arros.
The arrival of a first Airbus A330-200 in the third quarter represented a key part of the new business plan and a second aircraft is due to arrive early in 2013. It will most likely be used to open a new non-stop link to China.
“In the early part of our restructuring programme, we had to take some difficult decisions, reducing headcount and operations to more efficient and sustainable levels. Now that we have established a sound basis, we are committed to investing in our people so that we can build a truly world class airline,” said Cramer Ball. “We are now moving forward positively as a business and we are confident that we will achieve profitability for the financial year to December 31, 2012, if market conditions remain as forecast.”
Air Seychelles was established in 1978 and began long-haul service in 1983. The airline currently offers international flights to Abu Dhabi, Johannesburg and Mauritius and offers more than 160 domestic scheduled flights a week throughout the archipelago, as well as domestic charter services. As the national airline of the Republic of Seychelles, Air Seychelles is a pillar of tourism, the island nation’s strongest and growing economic sector.
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