Air Seychelles: The gateway to an island economy

The aviation industry continues to enjoy growth, with airlines looking at opportunities across the world to expand horizons and improve bottom lines. For smaller nations, synergies and economies of scale play an important role in operations, strategy and ultimately expansion; such is the case at Air Seychelles, where air transportation is a key component to the island economy.

3Air Seychelles began life in 1978; owned by the government and serving the nation’s economy, the business has undergone significant change in recent years and its Indian Ocean location has given it an additional advantage.

In July 2015, Roy Kinnear joined Air Seychelles as CEO, from Etihad Airways where he served as the Senior Vice President for Revenue Management and Planning for several years.

Kinnear saw an opportunity to boost efficiencies in the operation whilst increasing the growth not only of the airline, but also to help boost the island’s tourism economy.

“At a personal level, Etihad is very good with opportunities for career progression. With big organisations it is often about access across the company to learn different skill sets for succession planning.

“There was an opportunity to take up the CEO role for an entire airline and it was an exciting opportunity I felt compelled to take.

“With regards to Air Seychelles, I think it is fair to say that the company has been through extensive restructuring to help stabilise the business over the last 3 years  and we now need the brand and product to work towards airline profitability and expansion.”

That restructuring came in earnest in 2012, when Etihad Airways took a 40 per cent stake in Air Seychelles, with the local government retaining a 60 per cent shareholding. Kinnear says that the change has brought about a positive uplift in the airline’s fortunes, something he intends to continue to grow:

“There were 2 main factors to Etihad Airways becoming involved,” he states. “Historically Air Seychelles had been in troubled times financially and needed to overhaul its processes. But the airline was also an attractive proposition to Etihad Airways; offering something niche within the Etihad Group, access to the Indian Ocean.”

The Air Seychelles’ website describes the company as: “A boutique island carrier with big dreams for the future. Air Seychelles, the national airline of the Republic of Seychelles, was established in 1978 and began long-haul service in 1983. As the main driver of tourism in Seychelles, it is a core pillar of the national economy.”

Perhaps, as Kinnear explains, the geographical location helped to make Air Seychelles an attractive proposition for Etihad Airways. The airline offers international flights to Abu Dhabi, Antananarivo, Dar es Salaam, Johannesburg, Mauritius, Mumbai and Paris and also operates daily domestic flights to Praslin and charter services throughout the archipelago.

“The company faces a very different scenario to the environment back in 1978 and back then Air Seychelles was routing via connecting points in Europe,” says Kinnear. “Even now it is very different to how we operated even 3 years ago. The restructure gave the company a greater focus on efficiency and network connectivity.

“In the last 6 to 9 months we have restructured our network for international flights and we have far more of a focus on partnerships. We now see growth in both point to point and connecting traffic. The back half of 2015 has seen an increase in our connected international network of between 10 and 12 percentage points on the opening 6 months of the year. There has also been an increase in our domestic flights, with a 25 to 30 per cent increase in the number of flights to our second airport in Praslin. There has been more focus on improved connectivity for tourists into Praslin and we now have a far more co-joined network internally and internationally,” he says.

“Tourism is the lifeblood for the country, so going forward, we need a greater focus on partnerships to help encourage international tourism. We work in partnership with Air Berlin, Air France, NIKI, South African, Jet Airways, Etihad Airways and Alitalia and we use these partnerships to help widen distribution and marketing.

“For example, Alitalia is better positioned to sell Air Seychelles to more people in Italy than we are. There is consequently a greater emphasis on working with partners to sell the Seychelles as a destination.

“Our arrangement with Etihad Airways means that we are able to tap into shared resources and infrastructure for greater efficiency,” Kinnear adds.

At present the Air Seychelles fleet comprises one A330 and two A320s which provide international and regional flights, while the company operates six twin otter aircraft for domestic scheduled services and inter-island chartered flights.

The coming year promises more exciting developments, with the start on January 27 of a new Seychelles to Beijing route. Aircraft ownership has played an important part in this initiative, with Air Seychelles required to have its own registered service.

HMA330_Inflight_072014“China even with indirect services was among the top 6 countries of origin for tourists visiting the Seychelles,” he states. “We have had over 14,000 guests from China this year which underlines the demand and we are excited to be flying direct in the near future.”

This new route builds upon a successful 2014 in which flights to Mumbai Antananarivo and Dar es Salaam were introduced, while the past year also saw an increase in frequency and a changed network for the services to Mauritius and Johannesburg. Kinnear is hopeful that Air Seychelles will be adding to its fleet of aircraft with another A330 by the end of next year.

Expansion is of course good news not just for the island’s tourist industry, but for its residents.

“Air Seychelles is one of the biggest companies on the island and we employ approximately 700 staff, with 98 per cent of these Seychelles nationals,” Kinnear explains. “All of our cabin crew are nationals and we have adopted a purposeful intention with our recruitment. We have a strong belief in the Creole Spirit and we want our passengers to feel the Seychelles Spirit the moment they step onto the plane.”

That recruitment drive has led to significant investment in training; but once again; the value of the Etihad Airways partnership also has an important part to play, with cabin crew, engineers and pilots all heading to Abu Dhabi where they are provided with extensive training.

“We have a graduate management development programme and send trainees to Abu Dhabi for 18 months where they work through a range of Etihad departments and then come back here to work in various departments of our airline, such as: finance, audit and marketing. It is really a fast-track management programme,” says Kinnear.

Tourism currently accounts for around 90 per cent of passengers flying with Air Seychelles, although Kinnear says that the business community is not forgotten as the airline aims to build a business hub for the Indian Ocean region.

There are clear peak periods during the year when Air Seychelles is busiest, with July and August very popular months. However, Kinnear feels that other times in the year offer opportunity rather than a general acceptance of quieter times:

“Seasonality should never be used to hold a company back,” he asserts. “Off peak seasons should not stop airlines from going out to stimulate demand.

“In my first 6 months here, we have placed a priority on planning and growing revenues, so we are already focussed on next year and stimulating demand. The key thing with peak periods is to ensure that we have the right number of staff in the right place to ensure the customer has the right experience.

“One of the major items we have invested in was changing our reservations and check-in platform, and from March 18, 2016 we will be moving to Sabre from the Sita platform.

CEO letter“We are an inbound tourist destination and more partners will mean more guests. Part of good customer service is to provide through-boarding cards for onward flights, without having to stop for check-in at each airport. Sabre offers commonality of systems with a range of our partners and brings speed and efficiency for the customer when it comes to checking-in.”

Air Seychelles has come a very long way in just 3 years and under Kinnear’s watch is set for much more growth and change in the coming years. That change will be achieved hand-in-hand with the local tourism board, as he explains:

“We operate a co-joined approach when it comes to marketing, to ensure that we are conveying the same message.

“As an airline, we will be looking to expand and we are already seeing the benefits of the changes already in place. Twelve months from now we will have the Chinese link on board, so the demographics may start to change.

“It is a good time to be involved in the aviation industry here and the Seychelles is a paradise destination – there will always be demand for luxury locations,” he concludes.