‘Air Seychelles’ aim is to become sustainable,’ says acting CEO |28 September 2022
Air Seychelles has said its main objective is to ensure it becomes sustainable.
The company’s acting chief executive, Sandy Benoiton, made the statement ahead of the company’s 45th anniversary on October 26.
The Seychellois-owned company, with 596 staff, completed its payment to its former bond holder and said it expects a positive result at the end of the year.
Seychelles NATION spoke to the CEO this week to get an update on the company’s performance to date.
Q: It was in July last year, one year on that you assumed the new position of Acting Chief Executive of the national airline, thus exposing you to various facets and challenges of the business. So tell us the work you have been doing to strengthen the national airline.
SB: There were a lot of challenges and the financial challenge was compounded by the Covid-19 pandemic. Of course it was challenging for the whole team but I am proud to say that we stepped up to the challenge. I would say the airline’s biggest strength is our staff and the whole team came together. I never got scared because I knew the people we had and their capabilities. We are all passionate about the airline, so all of us as Seychellois wanted to see it back on its feet, especially since it is celebrating its 45th anniversary this year.
Q: What did you inherit and what is Air Seychelles’ status today?
SB: We inherited a massive debt; the bond holders’ debt was around US $84.5million including the accumulated interest. Obviously it was during the Covid-19 pandemic and our route network was closed, therefore reducing our operations significantly, as well as our revenue.
Today, as you may have heard Air Seychelles was able to pay off the bond holders on May 11, 2022 and we are not receiving any subsidy for current operations from government. Air Seychelles has taken out a US $16.5 million loan from local bank Nouvobanq to make this settlement which was negotiated at a discount and in addition, the balance that was negotiated with the bondholders was paid with our own cash flow. This means we are not bringing forward a large debt. Instead of taking a large loan which in turns leads to bigger debts, we have preferred to take this approach which is more sustainable.
Q: While the national airline was facing all these difficulties during the Covid-19 pandemic there was also several readjustments in salaries at the airline, no one was made redundant. What is the situation like now?
SB: We did not lay off anybody but 80 staff left the company under voluntary redundancy.
Q: You’ve mentioned the airline has resumed all flights on its routes, what is the overall performance of these routes?
SB: Air Seychelles’ performance for the past 6 months have seen the airline flow with an average load factor of 53% across its network. In terms of passenger numbers, Johannesburg is performing better with over 12,118 passengers to and from Seychelles from January to June 2022 after having operated 149 flights. This is because we are flying more on this route at the moment. However, the best performing route remains Tel Aviv based on the revenue and seat factor, having operated 118 flights between Tel Aviv and Seychelles in the first half of the year carrying over 11,481 passengers to the island.
Q: On the cargo side of the business how is it going at the moment?
SB: As a cargo carrier the airline is performing best on the Mumbai route. The most common item being exported at the moment are the fresh iced fish. If I was to compare the airline’s cargo performance from last year January - June 2021 with this year’s performance, during the same period, I would say that there has been a huge increase in the quantity of inbound cargo from 38 tonnes in 2021 to now 109 tonnes in 2022.
Looking at the performance of Air Seychelles cargo as a handler on the other hand, Turkey remains the most dominating route again for export of fish. Compared to January - June 2021 and the same period this year, the airline has handled 1959 tonnes of inbound cargo more for the last 6 months while a total of 896 tonnes of outbound cargo has been handled.
Q: The President also announced then that the national airline was conducting chartered flights to Afghanistan. Are these still under way?
SB: Yes these are still on the way from the contracting partner. Essentially the contract is a win for the airline, given that we are still operating in an unprecedented environment. As part of the airlines due diligence process, the aspect of safety and security, ensuring compliance and comfort to all stakeholders is of utmost importance, hence exploring charter opportunities and contracts such as these are ongoing on our end to ensure a sustainable future for Air Seychelles.
Q: Will Air Seychelles invest in a new aircraft soon?
SB: Things are dynamic so we don’t have a concrete answer at the moment but we always look at what is available on the market and keep our options open.
Q: Sometimes we hear comments that the airline is not viable and it should close down. What are your views, do you think this is justified?
SB: No, because other airlines do not really put your country’s interest first. It is important to look at the airlines’ economic contribution towards the country holistically to understand the added value that Air Seychelles brings to the country.
Q: How would you describe the airline’s performance today?
SB: Despite the pressures such as Covid-19 at the beginning of the year, payment to our bond holders which reduced our cash flow and other factors like the hike in fuel prices, if everything goes well without disruption, we expect to see a positive result this year.
I think the worse is behind us, although this is a dynamic sector and we obviously don’t know what might happen. We do not have control over some factors but for those that we have control over, for now I can say we are comfortable with where we are. This again is attributed to our devoted staff, who ensure the strategies in place are actually working. Our team is vigilant and always review and monitor the internal and external factor. We are not reactive but rather pro-active.This is one of the reasons why we are expecting a positive result at the end of the year but let us wait for what will happen in the upcoming few months before we close the year.
Q: Are you comfortable with where the company is at the moment or could it have done better?
SB: Given the circumstances, with all the challenges, I would say we are comfortable where we are. But as mentioned based on the initiatives taken together with the Air Seychelles team, our staff’s understanding and resilience are the most important factors.
It should be noted that Air Seychelles has always been influenced by internal and external factors and this will always be the case. One of the internal factors is government policies. For example encouraging other carriers to fly to Seychelles was not in our favour as it created the competitive environment, which affected us as a small airline.
Another factor was flying some routes which were not viable for us, as an airline. Although it was good for the country, it was detrimental to the airline.
Today we know it is always important to do this evaluation and look at it from an economic perspective in terms of the money that stays in the country. So it is important to ensure we are managing the company properly.
Q: What other ventures have Air Seychelles tapped into one year on?
SB: One year on, in terms of elevating its brand and performance, the airline continues to operate charter flights to Maldives from both Johannesburg and Tel Aviv on demand. (Besides its scheduled flights). It is to note that gradually Air Seychelles is establishing itself as a charter operator across the region which enables the airline to generate additional revenue. Air Seychelles has also resumed commercial flights across all its destinations aiming at restoring pre-pandemic load factors.
Q: Air Seychelles is this year celebrating its 45th anniversary on October 26. How will the company celebrate this milestone?
SB: This year’s anniversary is in honour of our employees and faithful clients who have supported the company. It is also a time to express our gratitude to our board members for their continuous support towards the airline.
Activities to mark this milestone will be centered around celebrating our achievements. It should be noted that 45 years on, Air Seychelles is mostly Seychellois, with only one expatriate employed with the company.
Other than gatherings for our staff, we will also have various promotions for our esteemed customers whom we value a lot but we will announce the details later as we do not want to spoil the surprise for all the activities planned.