Current times have set hard financial challenges for airlines all over the World. On Tuesday the 5th of October, in a press release, Air Seychelles announced that two administrators have been appointed to reorganise the company. The airline states that operations are, for the time being, running regularly.
It is stated that the company’s disastrous financial situation is due, unsurprisingly, to Covid-19, but mostly because of the “significant debt” accumulated during Etihad Airways’s stewardship of the company, between 2012 and 2021. The Abu Dhabi-based airline used to own 40% of Air Seychelles, with the remaining 60% in the local government’s hands. Part of the debt was directly generated by Etihad, along with more than $72 million (53 million £) of loans to external stakeholders.
During the summer of 2021, Etihad Airways partners filed a request to wind-up the airline, ending all its operations. However, this option has been withdrawn by the airline’s shareholders.
Now, the two appointed administrators, Suketu Patel and Bernard Pool, will need to consider the best ways of restructuring the company and settling its debts.
With Seychelles’s government being the only shareholder of the company, decisions have to be made about the destiny of the airline, in the medium and long-term future. Air Seychelles states that the company will undergo a process of restructuring and reorganisation, in order to optimise revenue.
According to Seychelles News Agency, the administrators might also consider a more drastic shutdown. However, this solution would also affect the airport operations as Air Seychelles also manages ground handling services in several airports on the islands.
This is the second reorganisation period for the airline as in 2018, under Etihad’s wing, the airline returned to leasing their Airbus A330, closing their only scheduled long-haul route to Paris and all other European charter destinations, in order to focus on regional operations.
Currently, the airline operates five DHC-6 Twin Otters for regional operations and two Airbus A320neo for their six international destinations across the Indian Ocean.