Etihad Airways sold its 40 per cent stake in Air Seychelles to the Indian Ocean island as the Abu Dhabi airline moves away from a strategy of growth through investments in other airlines.
Etihad announced that its management contract had also ended but said Air Seychelles' chief executive Remco Althuis and chief financial officer Michael Berlouis would stay on until June 30 to assist with the airline’s transition.
An Etihad spokeswoman said the UAE airline would no longer be a shareholder in Air Seychelles but she did not provide the value of the sale. Etihad acquired the stake in 2012.
The move is in line with Etihad’s five-year restructuring plan under which it is stepping back from its global equity alliance strategy and repositioning itself as a mid-sized boutique airline operating smaller, wide-body aircraft.
Boeing's 787 Dreamliner will serve as the “backbone” of the fleet.
For the Seychelles, famous for its turquoise beaches and diving spots, the deal is an opportunity to focus on profitable routes as air travel recovers from the coronavirus-induced slowdown that crimped demand.
“This is a time of opportunity for both Air Seychelles and the country as tourism starts to rebuild following the reopening of its borders,” Etihad said.
The airline said it remained committed to Air Seychelles as a commercial codeshare partner.
“The Seychelles is an important destination on Etihad’s global network, with bookings steadily increasing following its reopening to tourism,” Etihad said.
Patrick Payet, the island nation's Secretary of State in the Ministry of Finance, said a debt of $72.3 million that Air Seychelles owed Etihad had been discounted by 79 per cent, according to the Seychelles News Agency. Repayment of the remaining debt will start from 2022 onwards.
The Seychelles also offered to pay $20m of the $71.5m still owed to bondholders, he said.
The island nation is in discussions with the Trade Development Bank for a government loan to pay bondholders and Etihad, he said.
“All of these liabilities will be in the government’s books, so Air Seychelles will have a clean sheet from the liability that they have,” said Mr Payet.
A new board of directors has been appointed at Air Seychelles that will appoint a new chief executive and chief financial officer, the news agency reported, quoting government officials.
The board will also review the airline’s operations and make recommendations to the government, it said.