Etihad Airways, the national airline of the United Arab Emirates (UAE) which also operates daily flights between Abu Dhabi and Lagos, during the week, expressed satisfaction over the turnaround of its equity partner, Air Seychelles, which has posted a profit of $1 million following three years of losses.
The net profit was achieved just one year after Abu Dhabi-based Etihad Airways acquired a 40 per cent stake in Air Seychelles along with a five-year management contract to provide strategic support and management expertise in reshaping the airline as a sustainable commercial entity.
The result marks a dramatic change of fortune for the Indian Ocean carrier which had made heavy losses for past three years.
“The challenges in the global economy mean it is still a very tough environment for airlines. Against that backdrop, this is an impressive result,” James Hogan, Etihad Airways’ President and Chief Executive Officer, said.
“This performance validates the strength of our equity alliance proposition in which closer committed commercial collaboration drives revenue growth, and the integration and consolidation of key functions, achieves economies of scale and cost savings.”
“It is also testament to the hard work and willingness of the Air Seychelles team to embrace change and make the tough decisions required in reshaping their business.”, he said.
According to the airline, network and fleet planning centralised in Abu Dhabi has resulted in a new network plan which will support the hugely important tourist sector in Seychelles more effectively with good connections and broader choice for visitors to the archipelago.
The optimised schedule, it says, has also enhanced connectivity with Etihad Airways and other partner airlines over Abu Dhabi.
Also, 19 new code share destinations with Etihad Airways will open up key European markets.
Leveraging synergies and economies of scale arising from its relationship with Etihad Airways, Air Seychelles has been able to achieve substantial savings and cost reductions in aviation insurance, international catering and ground handling and in flight entertainment.
The conclusion of joint contracts for fuel, uniforms and stationery supplies, all contributed to significantly reduced costs.