Dubai: Etihad Airways’ equity stake partner, Air Seychelles, is seeing the return on the Abu Dhabi investment with the airline posting its second consecutive year of net profits on Thursday.
Air Seychelles posted a 171 per cent jump on annual net profit to $3 million (Dh11 million) for 2013 with revenue climbing 107 per cent to $88.7 million.
In 2012, Abu Dhabi government-backed Etihad announced it was taking a 40 per cent stake in the then-ailing airline. But the equity stake came with strings attached — Etihad took on a five-year management contract of the airline.
“The bigger benefit in this relationship is undoubtedly to Air Seychelles,” said Will Horton, senior analyst at CAPA – Centre for Aviation.
Air Seychelles used the tie-up to flow traffic from Etihad’s hub in Abu Dhabi, which the Air Seychelles’ new chief executive, Manoj Papa, calls the “trunk” of its network.
“We are able to take our guests not just point-to-point but to any destination and the nice thing about it is that it has a huge impact on our revenue,” said Papa in a phone interview.
He added that 30 to 40 per cent of the airline’s performance is attributable to its five codeshares partners.
“Air Seychelles would have struggled to have the reach and size it does today if it did not have a hub partner. [Its] mere existence would not have been guaranteed,” Horton said.
The airline’s passenger numbers reached 352,474 in 2013 and it carried 5,529 tonnes of cargo, up 159 per cent.
Looking ahead, Papa, who recently took over from former chief executive, Cramer Ball, said he would continue to steer the airline in the same direction.
“If it is working, why change it?” he said.
Air Seychelles will soon add two more services — a direct service to Mumbai, and another to Paris via Abu Dhabi — as well as increasing Abu Dhabi connections from seven-a-week to 10.
The airline will also raise its three-times weekly service to Mauritius to four in hopes of securing more slots in the near future, Papa said.
Last month, Etihad said partnership revenues increased by 30 per cent to $820 million in 2013 when the airline announced $62 million in net profit.
“Etihad has stated benefits from its partnership with Air Seychelles, but there have been reports of political relationships that underpin the Air Seychelles-Etihad partnership,” Horton said.
In 2008, the UAE granted a $30 million injection to the debt-troubled Seychelles government.