Air Seychelles could stop operating international
The Covid-19 pandemic has pushed Air Seychelles further into the financial crisis.
The loss-making company, in which Etihad Airways is a 40% shareholder, is a burden on the taxpayer. Its withdrawal from international routes could reduce the bleeding, believes the President of Seychelles.
Air Seychelles could permanently close all its international routes.
In any case, this is what the President of the Seychelles hinted at on Friday January 22, during his State of the Nation address. For Wavel Ramkalawan, it is better if the parastatal company focuses only on domestic transport and ground handling services, instead of competing on international lines where it is practically in deficit. "We have to make a decision and my government will do it. And I wonder if the time is not right for Air Seychelles to focus on domestic flights and abandon the international segment which is a problem for the company,”he said. According to the Head of State, the budget-heavy company is a burden on the state coffers. Air Seychelles is accumulating losses of 800 million Seychellois rupees (37.8 million USD) and is now seeking 109 million Seychellois rupees (5.15 million USD) in budget support to finance staff salaries, he revealed. Air Seychelles is a 60/40 company between the Seychelles government and EAG Investment Holding Company Limited (EAGIHC), a subsidiary of Etihad Aviation Group. When it bought its stake in 2012, EAGIHC paid for it by investing $ 20 million and providing an additional $ 25 million in a loan to Air Seychelles. To contribute to its growth, the company benefited from part of the debt (maturing over 5 years) of USD 1.2 billion raised by its shareholder - Etihad Airways - on international markets between September 2015 and May 2016.
But the scheduled reimbursements have become particularly onerous due to the health crisis. It now owes $ 72 million to its creditors, including Ethad Airways Partners II, which last year rejected its offer to reduce the value of its loan to $ 15 million. As a reminder, Air Seychelles, which operates two A320neo and five DHC6-400, has so far only resumed flights to South Africa (November 7, 2020) and Israel (November 18, 2020). Its lines to Mauritius and India have been suspended since March last year, as part of the fight against the spread of the Coronavirus. On the domestic front, the Seychelles pavilion reopened its Mahé - Praslin corridor on May 4. Between December 4, 2020 and January 9, 2021, it offered 1 weekly flight between South Africa and Maldives.
Air Seychelles could permanently close all its international routes. In any case, this is what the President of the Seychelles hinted at on Friday January 22, during his State of the Nation address. For Wavel Ramkalawan, it is better if the parastatal company focuses only on domestic transport and ground handling services, instead of competing on international routes where it is practically in deficit.
“We have to make a decision and my government will. And I wonder if the time is not right for Air Seychelles to focus on domestic flights and abandon the international segment which is a problem for the company,”he said. According to the Head of State, the budget-intensive company is a burden on the state coffers. Air Seychelles is accumulating losses of 800 million Seychellois rupees (37.8 million USD) and is now seeking 109 million Seychellois rupees (5.15 million USD) in budget support to finance staff salaries, he revealed. Air Seychelles is a 60/40 company between the Seychelles government and EAG Investment Holding Company Limited (EAGIHC), a subsidiary of Etihad Aviation Group. When it bought its stake in 2012, EAGIHC paid for it by investing $ 20 million and providing an additional $ 25 million in a loan to Air Seychelles. To contribute to its growth, the company benefited from part of the debt (maturing over 5 years) of USD 1.2 billion raised by its shareholder - Etihad Airways - on international markets between September 2015 and May 2016. But the scheduled reimbursements have become particularly onerous due to the health crisis. It now owes $ 72 million to its creditors, including Ethad Airways Partners II, which last year rejected its offer to reduce the value of its loan to $ 15 million.
