Air Seychelles, which last year came under Etihad Airways management, has returned to profit after three years of significant losses.
The national airline of the Republic of Seychelles reported a net profit of US$1 million for the 2012 financial year.
It follows the airline's impressive third quarter figures posted last October, that showed revenues of $13.8 million in the three months ended 30 September 2012, up 23 per cent on the three months ended 30 June 2012.
The carrier attributed the result to a 51 per cent increase in passenger numbers to 79,887 and a 17 per cent increase in load factor to 60 per cent over the quarter. Over the year the airline has carried almost three quarters of a million passengers on its domestic and international network.
The results come after Etihad Airways acquired a 40 per cent stake in the airline last March, and was awarded a five year management contract valued at the time at $65 million.
Etihad's intervention had saved the airline from bankruptcy, according to James Michel, the president of the Republic of Seychelles at the time.
Founded in 1978, Air Seychelles had been flying in profit since 1983. Then, in 2008 the world economic crisis, the the euro crisis and fuel costs forced the airline to seek government help, but the Seychelles government was also in financial crisis.
"We urgently needed to find a partner that would give Air Seychelles the economies of scale and synergies of a larger business entity," said Mr Michel.
"The choice of Etihad Airways as a strategic partner has been the right one," said the chairman of Air Seychelles, Joel Morgan yesterday. "Working with our new partner, we have had to make some hard decisions to turn the airline around. We are now seeing the successful results of our strategy."
"To record a profit after the immense challenges we faced a year ago is an incredible achievement. The recovery of Air Seychelles is a new chapter not only in our airline's history—but our nation's."
Under the Etihad management plan, Air Seychelles' business was stripped down, and about 250 jobs cut, to bring the workforce down to it s current 550 level. Contracts for catering, ground handling and in-flight entertainment, and the conclusion of joint contracts for fuel, uniforms and stationery supplies were renegotiated to reduce costs.
A new network plan to support the hugely important Seychelles tourist sector allowed Air Seychelles' network to expand through 19 codeshare destinations with Etihad Airways, opening up key European markets, and with the introduction of four flights a week to Abu Dhabi.
During the year, the airline introduced an Airbus A330-200 and wet-leased an Etihad Airways' Airbus A320 on the Mauritius route. A further A330 joined the fleet last week, to operate a new route to Hong Kong.
In-flight entertainment was also upgraded with every seat offering video-on-demand, with expanded movie selections and games scheduled for early in 2013.
The year also saw the integration of the frequent flyer program, Seychelles Plus, with Etihad Guest, for its 18,000 members. A recently announced codeshare with Air Berlin, another of Etihad's equity partners, will further expand Air Seychelle's network throughout Europe.
"Our partnership with Etihad Airways has made us a bigger player in the global aviation scene and we are better able to withstand the uncertainties and volatility in the global economy," said chief executive officer of Air Seychelles, Cramer Ball.
"In addition to our natural organic growth, in 2013 we're looking to broaden our network through partnerships.
"We are going to continue to build our capacity with the second A330-200, allowing us to start flights to Hong Kong to capture the lucrative Asian leisure market in March 2013. We will also be increasing the frequency of flights to Abu Dhabi, Johannesburg and Mauritius.
"We have responded to the demand from our affluent leisure and tourism guests by introducing a new international inflight product and can now offer a business class experience to rival any airline (including) on demand dining in business class. Also we are the only airline to offer a lie-flat business class seat flying into Seychelles," Mr Ball said.
Seychellois produce now features on the food and beverage menus. One hundred and thirty-six cabin crew have undergone training in Abu Dhabi to deliver a higher quality service and twenty-nine Air Seychelles pilots have also been trained on the A330-200.