Summary
- Air Seychelles achieved its first full-year profit since 2016, posting an $8.4 million profit in 2022, indicating a major recovery after the pandemic.
- The airline settled a $28.16 million debt owed to bondholders, closing a chapter on its $71.5 million debt burden and emerging from administration successfully.
- Air Seychelles implemented cost-saving measures, modified its fleet, and operated charter flights to survive the pandemic, contributing to its improved financial performance in 2022.
The flag carrier of the Republic of Seychelles, Air Seychelles, has announced its 2022 financial results, posting an $8.4 million profit. That is its first full-year profit because the small $425,000 gain in 2016. The carrier began 2022 with a negative net asset position of $100.6m after reporting a loss of twenty-two.7m the previous yr. Since emerging from the pandemic, the carrier has shown significant recovery through its financial performance.
Debt settlement
After facing several financial and operational challenges worsened by the pandemic outbreak, Air Seychelles entered company reorganization with the appointment of administrators in October 2021. Its financial difficulties got here from the large amount of debt that was incurred through the stewardship of the airline by Etihad Airways.
The corporate restructuring process began after Etihad sold its 40% stake within the carrier to the federal government of Seychelles. Following the sale, Air Seychelles owed over $70 million to the Abu-Dhabi-based carrier, but after receiving a 79% discount, it might pay 11.34 million. Nevertheless, it still owed a major amount to bondholders.
Photo: Markus Mainka/Shutterstock
In May 2022, the carrier settled a $28.16 million debt owed to the Bondholders through a 16.5 million bank loan from Nouvabanq and $11.7 million from its money reserves. This was a noteworthy settlement that closed the chapter on the $71.5 million debt burden it had been carrying for the past eight years.
Emerging from administration
The Seychellois carrier emerged from administration and reorganization in November 2022. It managed to shut the yr with a positive $19 million net asset position, a $104 million increase from its negative $85 million net asset position in October 2021.
The restructuring process was considered successful because the carrier witnessed improved operational and financial performance. In FY2022, its overall revenue recovered 93% of 2019 and exceeded pre-pandemic figures in Q42022. Last month, when Easy Flying spoke to Air Seychelles CEO Sandy Benoiton, he said that the corporate was expecting excellent results for 2022, including a net profit, which is sort of an achievement for the airline.
Photo: Air Seychelles
By the tip of the yr, the corporate achieved an overall profit of $119.6 million. Nevertheless, after excluding the debt-write-off gains from the debt discount during administration, the airline’s full-year profit stood at $8.4 million. Air Seychelles has been operating for over 45 years, and last yr, it achieved one of the vital significant turnarounds in its history. The airline’s Board of Directors and Acting CEO attributed the success to the staff, the Seychellois government, the general public, the legal team, creditors, and administrators involved in the method.
Emerging from the pandemic
Since emerging from the pandemic, the Mahé-based carrier has seen a rise in operational stability, also reflected in its 2022 financial performance. To survive this era of reduced air travel, Air Seychelles went through several transformations and implemented various cost-saving measures, which the CEO said contributed to last yr’s profit.
The airline also modified its fleet from the Airbus A320ceo to the A320neo and stretched the capabilities of the single-aisle aircraft by operating charter flights around the globe. Other than its regular service to Johannesburg and Tel Aviv, Air Seychelles flew to Australia, China, Romania, Senegal, the Netherlands, the UK, and several other other destinations.
In 2023, Air Seychelles has seen a major increase in passenger traffic, with demand rising above 2019 levels. Nevertheless, the carrier needs more capability to have the opportunity to satisfy the demand. With additional destinations and codeshares, it would look to complete 2023 strong as well.
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