"The focus of 2015 is building on our successes towards achieving the mandate of promoting tourism and trade" - Interview with Air Seychelles CEO
Air Seychelles CEO, Manoj Papa. (Seychelles Nation)
(Seychelles News Agency) - The Seychelles national carrier on Thursday reported a net profit of $3.2 million in 2014 attributing the figure to an increase in revenue, number of passengers and cargo tonnage in spite of considerable investment in terms of adding to its fleet and introducing new destinations.
This is the airline's third consecutive year of profitability since 2012.
Air Seychelles which was established in 1977 and adopted its present name in September 1978 was until 2012 wholly owned by the Seychelles government. UAE's Etihad Airways invested $45 million in Air Seychelles when it bought the 40% share in the airline in 2012 with the aim of turning the company around after several years of losses.
SNA caught up with Air Seychelles' Chief Executive, Manoj Papa where he talks about the airline's performance in 2014 and challenges encountered, what's in store for 2015 as well as his experience since he joined the airline.
The Ex- South African Airways general manager for commercial, Manoj Papa, joined Air Seychelles as CEO at the beginning of 2014. The South African national who started his career at SAA where he also held the post of regional general manager for Asia and Australasia, has also worked for Etihad Airways as vice president for corporate strategy.
SNA: Air Seychelles has published its financial results for 2014 announcing a third year of profit, slightly a little bit more than last year. What are the factor that have contributed to this performance?
MP: The mandate from our shareholder is very clear. Profitability, sustainability and be the economic enabler in the form of travel and tourism to Seychelles. This clear focus on our mandate resulted in us having to achieve the profit of 3.2 million. This was done and achieved through an increase in revenue, 20 percent, increase in passenger numbers by 20 per cent. Our seat factors from last year, 33 percent last year and seating at a 60 percent seat factor. The cargo tonnage up by 32 percent year on year. So all of these at the end of the day together with a highly skilled workforce, where we have invested extensively in our people has been able to allow us to achieve the results. This also is achieved through a very close support and could not have been done without the support of our shareholders and their commitment to seeing us grow.
SNA: What prevented the 2014 performance from being much better than the previous year.
MP: The airline industry is under a significant amount of pressure right now, and it's always been. It's prone to any changes around the world. You've got increased competition, we’ve got the introduction of A 380’s in the marketplace where 4 or 5 years ago they were not known of, we’ve got currency exchange and the currency issue, you’ve got Ebola virus, regulatory constraints, different market. So, all of that taken into account I must say the result of 3.2 million is a great achievement for Air Seychelles.,
SNA: How is this going to be passed on to staff as well as to the clients, for example, there is a lot of complaints that the airfare for the domestic flights is quite expensive?
Let me go into the question of pricing and concern of pricing for the local market. Our flights into Praslin (the Seychelles second most populated island) has got a specific Seychellois rate, only for Seychellois which is highly discounted. The Seychellois is able to obtain a seat during the course of the day, I have 30 – 40 percent seat factor of my 19 seats on an aircraft. There are seats for the Seychellois. The high demand flights which generally is in the morning and in the evenings is driven by means of demand and at the end of the day based on high demand there is also higher fees or higher pricing. That addressed the issue of pricing for the home market.
Our overall investment in our guest is based on investment in our product, is based on the investment in our onboard product, on the quality of our service, on the training of our people. So the idea at the end of the day is to focus on re-investing but in our products, being able to offer the guest a lot more value proposition ....a lot more comfort on board. So that is how it will be passed on to the guests in the form of the value proposition that we have to offer.
SNA: And the Staff?
MP: To our staff, our staff is the most important resource to the organisation. To our staff a further investment in training..... in development, a lot more exposure to best in class practises, a lot more ways of tapping into new systems....training and development..........that’s the way we are investing in our people. Developing them, growing them, training and coaching is ploughing stuff back into our people where they are able to take it going forward.
3 percent of our workforce is expats. What is quite interesting about the expatriates is that they are coming from different parts of the world and they are coming with wide airline experience and expertise. And for Air Seychelles to be the employer of choice it is very important because you can have this knowledge transfer. Air Seychelles is a global player and it is very important that our people are coached and trained, and developed and exposed to global standards. And a lot of investment is within our Seychellois.....We had three batches of cabin crew of ten or twelve each last year that graduated in Abu Dhabi, resulting in Air Seychelles receiving an award for the Indian Ocean leading cabin crew and leading business class. We are a four-Star airline, we‘ve gained a very strong positioning in the airlines in the Indian Ocean......but also globally as well.
SNA: Last year there were quite a few new destination. Air Seychelles went back to Paris. There is also the new regional routes to Tanzania, Madagascar and India. What is the trend so far would you say they are viable?
MP: We have noticed an increase in passenger numbers on all our destinations since implementation and since we started operations. The Paris operation is sitting around 60 percent, in excess of 60 percent seat factor. Our business is very seasonal and cyclical. So in the higher periods there is definitely a higher seat factor and for the lower season, yes, we see lower seat factor based on demand. With regards to Mumbai, since
With regards to Mumbai, since operation, in the last two months our seat factor is seating at 60 – 65 percent. Actually we had 2 days in December where our seat factor was sitting at 85 percent ........only going to show that there is demand for that destination.
Madagascar and Dar es Salaam are also growing at a steady pace. And what we are doing as an organisation is constantly monitoring those markets. No different to what we have done with our operations via Abu Dhabi into Charles de Gaulle, we are flexible enough to adjust our business model based on the changes in customers and their behaviour and what the market is doing. So for now, yes, our investment in the regional destinations with our A320.....flying into Abu Dhabi we increased our frequencies..... together with Etihad, we now do thirteen flights, almost a double daily......And the launching of Charles de Gaulle is definitely adding to the overall business results that we have shown for 2014.
SNA: What about direct flight into Charles de Gaulle which is a request coming from passengers as well as tour operators in France, it is still being considered?
MP: The operations into any direct flight is based on the economics and it's based on the demand. And what we do on our side from a network point of view we are constantly monitoring the market, monitoring our positioning, what are the economics at the end of the day. And we have a team working on that, so should the market should the demand actually grow in those destinations, it is something we'd look into. At the end of the day, we have got to ensure that with the support of our shareholder, the support of our people and with the support of all of Seychelles be it tourism, be it trade, that we achieve our mandate of profitability.
SNA: For 2015, What's on the cards for Air Seychelles….....Are there any big plans in terms of expanding the network........adding new destinations maybe?
The focus of 2015 is profitability. The focus of 2015 is building on our successes towards achieving the mandate from our shareholder in the form of promoting tourism and trade, being the key enabler to the Seychelles and Seychelles' economy. We will focus on doing that, we will focus on building on that, we will focus on identifying new market, not necessarily operate but identifying new market. We will work with the different stakeholders in building and developing, creating demand for such markets. We will focus on coaching, mentoring and investing in our people. At the end of the day, ........it allows us to show growth as an airline as we have done in the last three years.
SNA: When you are talking about identifying new markets...Is China one of them, as we saw the airline had two chartered flights from Beijing coinciding with the Spring holidays and considering China is also an emerging market for the Seychelles tourism industry?
MP: Asia is the emerging market. And yes the success of our two charters........bringing in some 500 Chinese to spend spring festival in Seychelles, really helped tourism....it made a great impact on the contribution to Seychelles. We will be working with our partners, we have identified some partners and we will be working on growing the demand and positioning Seychelles in those markets. And yes, charter operations, we have received request for charter operations out of Beijing.......and we will build on that.
SNA: You came in last year as CEO of Air Seychelles when the airline was two years into its strategic partnership with UAE's Etihad Airways. Apart from turning the national airline around to profitability, training Seychellois professionals to take on leadership role was also an objective. What is being done to ensure that this is achieved?
MP: The strategic partnership with Etihad has brought in a fair amount of value and it is a win for Seychelles, it's a win for employees of Air Seychelles and actually it is a win for the Seychelles economy.
To be the employer of choice and in the last 12 months and even prior to that, the management has been working very closely with Seychellois, with regards to training, developing. One of things about why the strategic partnership with Etihad works, we’ve had graduate managers that are based in Abu Dhabi, that spend eighteen months in Abu Dhabi. Their training allows them to go through all different divisions of the airline and get to understand the airline business. We then bring them back to Seychelles and they spend a month, two months getting to understand........and then go back to Abu Dhabi and get to apply what they have learned in the overall model. We now have seven individuals that have returned to Seychelles and incorporated in our business as part of managers.
Most recently, we took six Seychellois to join the worldwide team at Etihad and participate in the worldwide conference, again giving them exposure not only in the form of a bigger airline like Etihad but in networking and best practice.
We have our cabin crew that are trained. So a focus with regards to creating successes is where we are going. Again, if I talk about our performance, we introduced last year, a program called 'I achieve' which is a reward and recognition programme for our people based on performance......with that being said it allows us to identify our top performers and as a leadership team it allows us to come up with a career map on how best we can take their careers to the next level.
SNA: And for yourself, having been here for one year, how would you describe your experience working for Air Seychelles considering you have work for much bigger airlines. Do you feel you are achieving your mandate, the goal which you set when you came in last year?
M.P The airline industry, if it’s a small airline or big airlines have the same challenges. The last twelve months has been a great experience and a great learning opportunity for me.
I remember the last press conference as you mentioned I said my mandate was to ensure sustainability and profitability, our numbers have displayed that. I spoke a fair amount on training, developing and investing in our people, we have achieved that.
And yes, it is not a start end situation it is a continuous improvement...... what stands out about Seychelles is the culture......the willingness for success. And if you look at where Air Seychelles was three years ago, it was a really challenged airline........ And how it has transformed in the last three years, with the support of our shareholders, with the support of Etihad as our equity partner, with the support of our people, we’ve been able to deliver and take the airline to the next level.