Air Seychelles goes into administration

Air Seychelles has announced it is being restructured within the confines of the Indian Ocean archipelago's bankruptcy protection laws, with an administrator having now been charged with drawing up a turnaround plan. A statement issued jointly by Air Seychelles and the Seychelles Ministry of Transport and Civil Aviation on Monday, October 4, placed the blame for the airline's unsustainable debt burden on its former Etihad Airways-led administration. The Emirati carrier has since sold its 40% stake back to the Seychellois government, which now controls 100% of its shareholding. "Air Seychelles has faced significant challenges over the past 18 months arising from the COVID pandemic and its impact on international travel and tourism. However, Air Seychelles’ financial difficulties arise mainly due to significant debt that was incurred during the stewardship of the airline by Etihad Airways, which was previously a 40% shareholder in the company. This debt comprises amounts that were owed directly to Etihad and also loans of almost USD72 million that were funded by the capital markets and are now controlled by bondholders of EA Partners," it said. Although it is now the carrier's sole shareholder, the Seychelles government has warned that it would be unable to shore up its finances given capping arrangements recently agreed with the International Monetary Fund whereby no further government subsidy to Air Seychelles is permitted. <br/>