Future of Air Seychelles hangs in balance as government decision nears


(Posted 12th June 2021)

Air Seychelles, the national airline of the Indian Ocean archipelago, is looking at a very uncertain future.
The Seychelles government is saddled with a major debt burden, which is a result of the past partnership with Etihad. While the government was able to buy back the 49 percent stake Etihad held in Air Seychelles at literally peanuts, did is also acquire at the same time the obligation to repay a bond Air Seychelles had to take out alongside other Etihad partners. From information available does it appear that the bondholders are not ready to settle for anything less than the amount owed – without any write downs – and will rather force the airline into liquidation, something the government is now also considering.
Bankrupting the current Air Seychelles would by and large rid the government of financial obligations, while of course also damaging the reputation of the country abroad.
A new Air Seychelles could then be launched, concentrating on ground handling at the international airport, where the company enjoys a monopoly, while also relaunching their domestic network with their fleet of Twin Otter aircraft.

11 pilots however will face the cut already after the company wrote to the Ministry of Labour announcing the redundancies in addition to a voluntary retirement scheme offered to Air Seychelles staff several months ago.

Air Seychelles operations have been hard hit by COVID19 related route suspensions and bans on certain nationalities entering the Seychelles due to the escalating pandemic situation in those countries.
Route relaunches had to be delayed or suspended as a result, causing the company to bleed money.

ATCNews will monitor the situation and inform readers of the decision of the Seychelles cabinet, once a final decision has been taken.

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