Air Seychelles Safeguarding Long-Term Profitability

Air Seychelles header2The Seychelles’ national carrier Air Seychelles has announced a new strategic transformation plan aimed at ensuring the long-term profitability and sustainability for the airline. The plan is in response to rapidly increasing competition in the air travel sector, and has been approved by Air Seychelles’ Supervisory Board and both shareholders, the Government of the Republic of Seychelles and Etihad Airways.
Jean Weeling-Lee, Chairman of Air Seychelles, said: “The aviation industry is fiercely competitive and will become even more so in 2018, as some of the largest carriers begin flying to Seychelles. This transformation plan has been designed to restructure the Air Seychelles business to meet the challenges of the future while continuing to deliver strong results for the economy and people of Seychelles.”
The Seychelles archipelago will see a major influx of inbound seat capacity in 2018. In addition to airlines already operating to Seychelles (Turkish Airlines, Qatar Airways, Emirates Airlines, Etihad Airways, Kenya Airways, Ethiopian Airlines, Austrian Airways, Sri Lankan and Condor), British Airways has announced plans to launch flights from London to Seychelles in March, followed by Air France introducing services from Paris in May and the Swiss Edelweiss Air launching flights from Zurich in September 2018, creating overcapacity on Seychelles-bound services from Europe. This will create significant downward pressure on airfares and negatively affect the loads and forward bookings on Air Seychelles’ current three-per-week Paris operation.
To reduce the financial impact of such competition, Air Seychelles will consolidate its international network by suspending its Paris service effective April 24, 2018, and exit the two leased Airbus A330 aircraft out of the fleet. As part of the network efficiency development strategy, and considering the high dependence on the Paris traffic feed, the airline will at the same time discontinue its Antananarivo service. Passengers scheduled to fly on the Paris and Antananarivo routes beyond that date will be re-accommodated on other flights, and will be notified of the changes to their itineraries.
“The launch of competing air services from Europe to Seychelles will significantly impact Air Seychelles’ flights to and from Paris, which account for approximately 30% of total passenger revenue at the airline, making the route unsustainable in the long-term,” commented Remco Althuis, Interim Chief Executive Officer at Air Seychelles. “After considering all the options, we decided to withdraw from both Paris and Antananarivo and refocus on our core strengths – our domestic and regional networks. Doing so will enable us to concentrate on more profitable areas of the business, while people in Seychelles will continue to have non-stop access to France and wider Europe through airlines that can operate at more efficient international scale than Air Seychelles.”
As part of this strategic transformation, Air Seychelles will replace its regional fleet of two Airbus A320 aircraft with the next generation aircraft in 2019, enabling the airline to offer greater levels of comfort while increasing seat capacities and reducing operational costs. In addition, the airline will focus on developing its domestic operations, including inter-island flights between Mahé, Seychelles International Airport (SEZ) and Praslin Island Airport (PRI), scenic flight packages and island charters, which are set to play an increasingly important role as more international travelers visit the archipelago.