Air Seychelles posts 6.6% rise in net profit for last year

Airline plans to increase passenger numbers by 15 per cent this year through codeshare agreements.

An Air Seychelles plane stands parked, undergoing servicing, at Victoria airport, Mahe. Silvia Razgova / The National

Air Seychelles yesterday posted a 6.6 per cent jump in annual profit for last year.

The Indian Ocean airline, part-owned by Etihad Airways, reported earnings of US$3.2 million in 2014 versus $3m the previous year. Revenue rose 20 per cent to $106.9m last year from $88.7m a year earlier.

Manoj Papa, the chief executive, said that he planned to increase passenger numbers by 15 per cent this year. The airline carried 412,088 passengers last year.

Mr Papa said that the airline would be launching planned codeshare agreements with India’s Jet Airways and Air Mauritius during the second quarter of this year.

A codeshare agreement between two airlines allows them to sell and market each others’ tickets as their own, improving connectivity and filling seats that would otherwise remain empty.

Air Seychelles has already been flying to Mumbai since December, but the codeshare will allow it to connect to five cities in India beyond Mumbai.

“We are in advanced stages,” said Mr Papa. “It might be in the second quarter. Once we get the [Indian] regulatory approval, we will be able to move forward with that.”

Mr Papa said he expected the Air Mauritius codeshare to also come in the second quarter.

“We got the regulatory approval and we are finalising the technical issues of our partnership,” said Mr Papa.

“Partnership in our world is critical. We are a small airline and aim to grow the network, build depth and get the Air Seychelles brand out into many destinations as possible. This is the best way to do it.”

In 2012, Etihad took a 40 per cent stake in Air Seychelles in a deal worth $45m. The airline has since turned a profit for two consecutive years. Before the acquisition, Air Seychelles suffered back-to-back losses and changed management multiple times over a short period of time.

But the airline has yet to boost its passenger load factor to desired levels. It said that its partnership with Etihad, along with launching new routes last year, would help it to do so.

“I’ve seen load factor in 2014 move to 60 per cent. In 2013, it was at 50 per cent. Our target is to move it to the upper 60s in 2015,” said Mr Papa.

Air Seychelles, which bought an Airbus A320 aircraft last year, is operating a fleet of three aircraft for its international flights.

“Taking the A320 allowed us to do a regional strategy. It allowed us to fly 4.5 hours non-stop. That’s why we kicked off operations to Madagascar, Dar Es Salam and Mumbai,” said Mr Papa.

“We believe there will be an increase in 2015, as we would have operated in the three regional destinations for a full year. Last year in June, we started operations into Charles De Gaulle. We will also have the full impact of Charles De Gaulle in 2015,” he added.

France is the No 1 market for tourism in the Seychelles. The sector contributes to no less than 60 per cent of the country’s economy. Air Seychelles operated direct flights to France before the Etihad acquisition, but now it flies the route through Abu Dhabi.

The lack of direct connectivity to France may have affected passenger numbers, according to tourism officials.

“Based on demand, I am willing to consider it,” said Mr Papa. “If we see there’s strength in the market and there’s strong direct capacity, nothing stops me from operating my A330 from Seychelles to Paris.”

Mr Papa added that he would like to codeshare with Air France to bring his reach to different cities in France.

“I don’t have a codeshare partner with points beyond Charles de Gaulle. I don’t have a codeshare with Air France yet. It’s something that I would like,” he said.