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Routes to new markets...

Posted 4 December 2017 · Add Comment

With its traditional long-haul routes facing ever-increasing competition, Air Seychelles is looking east for a possible new source of revenue. Alan Dron reports.

It’s no easy matter predicting whether a new route will be successful. Every airline undertakes careful research before embarking on the cost of opening services to a new destination. But sometimes, external factors intervene to render that research obsolete.
In 2016, Air Seychelles looked at a number of potential new European destinations in France, Italy and the UK before settling on the German city of Düsseldorf. Part of the reasoning behind the choice was that Düsseldorf was on the route map of Airberlin – like Air Seychelles, an Etihad Airways partner airline. Air Seychelles believed that the German carrier would be able to channel traffic on to its route down to the Seychelles.
However, Airberlin is in the throes of a major reorganisation in an attempt to stem heavy and persistent financial losses. “A key codeshare partner, for their own understandable reasons, changed their intra-European network. That, unfortunately, negatively hit our Düsseldorf flights,” said Air Seychelles’ CEO, Roy Kinnear. “Airberlin wasn’t delivering as much throughput as we had anticipated.” Added to that, “Fuel prices are significantly higher now than they were 12 months ago.
“Quite frankly, it wasn’t covering the cost of the fuel and the crew and, once you reach those situations, you’re better leaving the aircraft on the ground.”
Air Seychelles announced in July that it was dropping the German city from its network.
The marketplace is currently “incredibly competitive” and many carriers are cutting prices and stepping on each-other’s toes to deliver passengers out of Europe to the Seychelles, said Kinnear.
The Middle East ‘big 3’ of Etihad Airways, Emirates Airline and Qatar Airways, together with Turkish Airlines, all have flights out of their respective hubs to the Indian Ocean archipelago and, in many ways, they have an easier task in filling their flights to Mahé than the islands’ own national airline, said Kinnear.
Taking advantage of their huge networks, they only need to have a few passengers coming off multiple flights transiting their hubs that can then connect on to their Seychelles flight, “whereas I’ve got to find 200 direct passengers”.
In its efforts to find new passengers, Air Seychelles is attempting to tap the burgeoning tourist flow from China.
Over the summer, Air Seychelles ran a six-week series of charters from Chengdu, plus three services from Beijing in September and October. The airline is talking to several partners and organisations about creating a future flight programme from China, either seasonal or year-round and on a scheduled or charter basis.
The Indian Ocean carrier has three distinct strands to its operation: long-haul services to Paris are handled by two Airbus A330-200s; Indian Ocean ‘regional’ routes to places as far apart as Johannesburg and Mumbai, as well as to neighbouring islands such as Mauritius and Madagascar, are covered by a pair of A320-200s; and island-hopping services within the Seychelles archipelago are handled by six DHC-6 Twin Otters.
The ‘Twotters’ are the new Series 400 models, manufactured by Canada’s Viking Air, which took over production of the rugged 19-seater twin turboprop from Bombardier some years ago. The latest two examples arrived in March this year and slotted into the busy schedule that sees some 300 inter-island flights every week.
Some of the new arrivals replaced Twin Otter models that had been in service for 30 years, so Kinnear is looking forward to a long period of gainful employment for the new fixed-undercarriage aircraft – probably 20 years or so. Their short take-off and landing (STOL) capabilities make them ideal for short island airstrips.
The Twin Otters fulfil two very different roles; they are used by islanders to get around the archipelago on business or to visit friends and relatives, but are also an important method of moving tourists around the islands.
“The Twin Otters carry a fairly even split between locals and tourists – about 52% to 48%,” said Kinnear. Long-haul services usually leave Seychelles International Airport near the capital, Victoria, each evening, while incoming services arrive in the early morning.
Air Seychelles builds banks of flights around those times. It is not unusual to see a queue of Twin Otters departing from the main international airport at 15-minute intervals in the morning for Praslin and the outer islands, taking tired tourists on the last leg of their long journey to a fortnight of relaxation on the islands’ beaches.
In the evening, the Canadian turboprops converge on the international airport once again, this time bringing in passengers departing for Europe or the Middle East.
Meanwhile, locals head to Johannesburg for shopping trips, while Seychellois business travellers make trips to regional destinations to purchase materials or goods for sale in the islands.
The Twin Otters also fulfil an impotent function in creating employment opportunities for young Seychellois pilots.
When the airline replaced its elderly Boeing 767s with the A330s in 2012, followed by the A320s, Airbus pilots were notably scarce in the Seychelles, leading to a pilot force that was heavily biased towards expatriate crews.
“To balance this we went out on a very heavy domestic recruitment campaign on the Twin Otter fleet. You ramp up [the young pilots], get them to 1,500 hours flying time and you have a ready-made pool of pilots you can then put through Etihad’s simulators and drip-feed them, two at a time, into the Airbus fleet. We’re now at the point where around 73% of the Airbus pilots are Seychellois. That’s good for us as an airline and for Seychelles as a country.”
Since 2011, Air Seychelles has been an Etihad partner airline and has derived considerable benefit from the arrangement. Etihad has a 40% shareholding in the company and, earlier in 2017, renewed a management contract for a further five years. Kinnear was, himself, previously with Etihad, where he latterly held the position of senior vice-president – revenue management and planning.
Air Seychelles can use its association with Etihad to cut unit costs through bulk-buying supplies ranging from engine spares to photocopiers.
It also has access both to Etihad’s simulators and cabin mock-ups in Abu Dhabi for training pilots and flight attendants and to skill sets and knowledge in fields such as reservations and ticketing: “We have a partner where we can use some of their base procedures and adapt them to the Seychelles environment.”
The next few years will throw up both challenges and opportunities, said Kinnear.
Competition between Indian Ocean tourist destinations – Seychelles, Mauritius and the Maldives, for example – is increasing. Tourism is the lifeblood of the Seychelles and other airlines are launching services into the region, so competition will hot up.
On the regional front – Africa and the Indian Ocean – there will be a challenge to find more growth, as some bilateral air service agreements are reaching their limits in terms of the number of frequencies allowed, while Africa presents a challenge in visa restrictions in many countries. (The Seychelles is a visa-free area.)
And there are industry-wide challenges such as airport security and rising fuel prices.
In many ways, Air Seychelles has grown up in the past few years. Kinnear’s predecessor, Manoj Papa, introduced technology to help keep headcounts under control and moved the company on to its own air operator’s certificate (AOC), whereas previously all its aircraft were leased.
“We introduced our own AOC and, once you start to do that, you have to really develop a company in terms of creating an operations control centre, safety guidelines, IATA operational safety audits, etc. We’ve really moved forward as an airline.”

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