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The Government of Seychelles and Etihad Airways in new partnership
Jan 26, 2012
Airlines
The Government of Seychelles and Etihad Airways have signed a Memorandum of Understanding wherein Etihad will invest to acquire a 40 per cent stake in Air Seychelles Ltd as part of a strategic partnership alliance initiative between Air Seychelles and Etihad Airways.
Etihad Airways' investment of USD 20 million will be matched by an equal capital injection from the Government of Seychelles. In addition, Etihad Airways will also provide a shareholder's loan of USD 25 million to meet working capital requirements and support network development.
Asia, and more specifically China, is increasingly important to the Seychelles national economy. Apart from the Seychelles strategic geographic significance as a stepping stone between China and Africa, the island nation is also an important trading partner for Chinese business and an increasingly popular leisure destination for significant numbers of Chinese travellers.
The agreement, which is the first of its kind in Africa, makes for provision for a five-year management contract for Etihad Airways that will see the implementation of strategic measures to encourage Air Seychelles' long-term commercial growth. Importantly, the partnership will offer unprecedented career development opportunities and access to Etihad Airways state-of-the-art training academy and facilities in Abu Dhabi for Seychellois aviation professionals.
Another important element of the agreement gives Air Seychelles office presence in Etihad Airways offices across the Etihad Airways network. This means vastly improved marketing possibilities for the country and its national carrier.
Finally, the new partnership will further drive consolidation of key functions, resulting in significant cost savings and process optimisation.
Also under the partnership:
Etihad Airways will seek to increase frequency of flights between Abu Dhabi and Mahé from four per week to daily, as well as providing new services to the islands;
Etihad Airways will work in conjunction with Air Seychelles to develop a renewed fleet and network growth plan for the island-based carrier;
The airlines will sign a comprehensive codeshare agreement to include Etihad Airways-marketed flights across Air Seychelles' network and Air Seychelles-marketed flights to Abu Dhabi and Etihad Airways destinations across Europe, the Middle East, the GCC, Asia and Australia.
Etihad Guest and Seychelles Bonus, the airlines' frequent flyer programmes, will be integrated to include mileage earning and redemption on each other's flights.
This agreement is Etihad Airways' second equity investment, following its December 2011 announcement that it would increase its stake in airberlin to 29.21 per cent, making it the single biggest shareholder in Europe's sixth largest airline.
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