Strange but True !
Back in 2012, Etihad had acquired 40% stake in Air Seychelles and the Seychelles government retained the remaining 60 per cent.
Welcome 2021, Etihad Airways has agreed to sell its 40 per cent stake in Air Seychelles for just US$1 and write off more than $60 million in debt owed by the Seychelles government.
Picture : Riik@mctr
The move is not a sudden decision and has roots to the $1.87 billion losses in 2016 due to a disastrous equity investment scheme. Since then , Etihad is making all efforts to cut short it business model.
The new deal will see the Seychelles government take full ownership of the national flag carrier at a steep discount.
Its like a golden deal for the Seychelles government - Air Seychelles had owed Etihad $72.3 million but the UAE based carrier has agreed to write off 70 per cent of the owed debt. Repayment of the remaining debt won’t start until 2022.
If the deal is approved , Etihad’s appointed chief executive and chief financial officer will step down on June 30.
In recent times, the airline snapped up its stakes in a series of faltering carriers that includes Italy’s debt-laden flag carrier Alitalia, loss-making airberlin and India’s defunct (now) Jet Airways.
Earlier, in an attempt to build a fourth global airline alliance, Etihad injected tens of millions of dollars but that turned out to be an unsuccessful gamble to turn around the fortunes of these airlines.
Now, the airline wants to turn around own fortunes by becoming a smaller but efficient airline. Chief executive Tony Douglas remains hopeful that even with the pandemic weighing down on the business, Etihad can turn a profit in the next couple of years.
Etihad’s fleet is also seeing a downsizing by retiring of Airbus A380’s fleet to match the post-pandemic business plan and the carrier is also phasing out Boeing 777-300 aircrafts by the end of the year.
