24-Jan-2018 12:53 PM

Air Seychelles to suspend services and restructure fleet under strategic transformation plan

Air Seychelles announced (23-Jan-2018) a new strategic transformation plan aimed at ensuring the airline's long term profitability and sustainability. The plan is designed to respond to rapidly increasing competition in the air travel sector. The Seychelles is expected to see a major influx of seat capacity in 2018 with the launch of services by British Airways in Mar-2018, Air France in May-2018 and Edelweiss Air in Sep-2018. Air Seychelles said the new services will create "overcapacity on Seychelles-bound services from Europe", adding: "This will create significant downward pressure on airfares and negatively affect the loads and forward bookings" on Air Seychelles' Paris service. Air Seychelles will implement the following measures "to reduce the financial impact of such competition":

  • Suspend Paris service, effective 24-Apr-2018;
  • Suspend Antananarivo service, effective 24-Apr-2018, due to the high dependence on Paris traffic feed;
  • Remove two leased A330 aircraft from the fleet;
  • Replace regional fleet of two A320s with "next generation aircraft" in 2019, enabling greater passenger comfort, increased seat capacity and reduced operational costs;
  • Reduce cabin crew and pilot workforce while supporting flight and commercial roles. Compensation packages, job search and employment support will be provided to affected employees;
  • Refocus on "core strengths", including domestic and regional networks, enabling the airline to "concentrate on more profitable areas of the business". The carrier will concentrate on domestic operations, including services between Mahé and Praslin, scenic flight packages and island charters;
  • Cost saving and revenue generating initiatives in 2018, including projects to strengthen non airline areas of the business such as ground handling, cargo handling and engineering services;
  • Product and service offering to be reviewed to "to reflect the latest trends in air travel and provide an enhanced experience" through the airline's website and other digital platforms.

Air Seychelles interim CEO Remco Althuis said: "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". Air Seychelles chairman Jean Weeling-Lee 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." Seychelles' Minister for Tourism, Civil Aviation, Ports and Marine Maurice Loustau-Lalanne said: "It is important that we take these tough but necessary steps at this time to safeguard the future of Air Seychelles". Etihad Aviation Group CEO equity partners Robin Kamark said: "We continue to stand alongside the airline as it undergoes this crucial transformation". [more - original PR]

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