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Office of the President of The Republic of Seychelles

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VP Says New Board To Tackle Air Seychelles' Financial Difficulties

Air Seychelles' new board have been asked to design a strategy to put the national airline back on track and lift it from its severe financial problems.
This was said by Vice-President Danny Faure in the National Assembly yesterday when he was answering a private notice question from opposition leader Wavel Ramkalawan.

Mr Ramkalawan wanted to know the financial situation of Air Seychelles and what sort of financial support it has received from the government and other sources during the last three months.

He also asked about the new financial administration that has been put in place since the last overhaul of the firm and what negotiations are being carried out with foreign airlines to buy shares in Air Seychelles.

Mr Faure explained that between April last year and January this year, the airline made a loss of €10 million, equivalent to R170 million. He said this figure is provisional as it has not been audited yet.

As a result of this situation the government had to intervene, through the Finance Department, and the airline has benefited from three loans.

The first loan of R30m, with the government, was approved in 2009 as part of a supplementary budget approved by the assembly. This sum was paid out in August last year.

A second commercial loan of R75m was approved with Nouvobanq last December.

It has an interest rate of 4.5%, a grace period of six months and repayment within a period of one year.

The third and last commercial loan, again with Nouvobanq and worth R150m - was approved in January this year. This loan has an interest rate of 4.5%, a grace period of one year and repayment has to be made within a five-year period.

In total Air Seychelles is benefiting from financial support of R255m.

Mr Faure said faced with this situation the government decided to appoint a new board and mandated members to review the financial position on a weekly basis. So far he is satisfied with the work that is being done.

"This board has to come up with a new strategy to remove Air Seychelles from its actual situation," he said. 

"We are confident that the airline, and its 891 competent, experienced and professional workers, will give their all to put the firm back on track."

Mr Faure said that in this financial crisis the government has brought in many experts, including some from regional firm Air Austral, but is not selling any shares.

"Air Seychelles has an important role for tourism and contributes to our economy," he said.

Of the 170,000 tourists who came here last year, 90,000 travelled by Air Seychelles, he added. "It has a strategic role for our economy, and we have to do everything to ensure its financial plans are always viable. This is what the new team, with the support of the Finance Department, will work to achieve," said Mr Faure.