Remco Althuis, CEO Air Seychelles, tells Graham Newton that niche carriers still have a role to play in the modern industry
Operating as a smaller airline can be difficult, having to comply with the same regulations as the industry heavyweights. Air Seychelles CEO Remco Altuis says that although tourism is vital for the archipelago and its flag carrier, size doesn’t matter when it comes to promoting the best of aviation and encouraging change on issues affecting the industry.
What difference will the A320neo make to the airline?
It will make a huge difference. Our fleet was quite old so this is the start of a modern fleet that will give us big efficiency gains on the regional network.
The first aircraft will primarily operate to Johannesburg and Mumbai. At 168 seats, it will give us 32 extra seats and more importantly will allow us to fly back from those destinations with a full payload. Because Seychelles is so isolated our nearest alternate airport is 1.5 hours away. So, the extra fuel we had to take on meant older engines didn’t allow us a full payload.
Now we have an aircraft with lower operating cost, producing less emissions that provides a better customer experience.
Tell us about the overall strategy for the airline over the next few years?
There is a five-year transformation plan to make the airline sustainable. The focus is on growing the domestic and regional network, which is why the A320neo is so important. We’re improving our inter-island flights and scenic charter flights.
At the same time, as part of the plan we have stopped international long-haul flights and we have given the A330 aircraft back.
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We’ve also reviewed the onboard product and with the arrival of the new aircraft we will offer a streaming service so that customers can watch content on their own devices. Not only are we tapping into a new technological trend but also a couple of hundred kilos of weight will be taken off the aircraft. We don’t need screens and heavy servers anymore. That means fuel savings and fewer emissions. The business will also be diversified. Our ground handling sector is making good revenue, so we’ll ensure that remains the case and we’ll put more effort into cargo. Overall, we are restructuring our cost base but keeping with the creole spirit of the airline.
What are the major challenges you face in successfully implementing your strategy?
The fuel price is always a challenge as is the geopolitical climate. There has also been an influx of capacity from the Middle East and Europe and that was a major reason behind our decision to stop international long-haul. The airline was just not in a position to compete.
We’re keeping a close eye on cargo because that is struggling, and passenger demand usually follows. But actually, visitor numbers to the Seychelles are expected to grow 5%-8% per annum. We’re confident that the Seychelles will continue to attract tourists.
Is aviation doing enough to promote diversity?
You can always do more. Seychelles is a diversified nation and is a matriarchal society, so we have a head start. There has always been a good mix of people working at the airline.
8%- Visitor numbers to the Seychelles are expected to grow up to 8% per annum
In our management team, there are slightly more women than men. Our Head of Ground Services is female as is our Head of Flight Operations, and our Head of Legal.
It is important to constantly engage with schools so the airline can reach the young talent pool and stay ahead of the diversification and recruitment curves. Proper succession planning is a part of this too, as is making sure all staff get the right amount of support.
And how about the environment? Is the industry message getting through to the public?
You have to constantly make people aware of the message. At Air Seychelles, we are doing a number of things to help the environment and the messaging. Though they may be small, they add up to the global message that the industry is taking environmental responsibility seriously front and center.
For example, our first A320neo is named after an endangered local bird, the Seychelles Paradise Flycatcher. We have decided to raise awareness about the environment of the Seychelles on our aircraft to sensitize our travelers about the importance of protecting the environment. You will also see information about the environment on our new streaming service that reduces weight and ultimately reduces emissions too. We no longer have straws onboard and we are working on a programme to stop single-use plastic.
It is important to constantly engage with schools so the airline can reach the young talent pool and stay ahead of the diversification and recruitment curves
Soon, Seychelles is banning the import of plastic cups, so we have to work out how to deal with that as well. It’s good because it will force us to be creative and creativity is what we need. That’s how we will work more efficiently as an industry.
The challenge for aviation is clear. It must answer the demand for its services with the minimum impact on the environment.
Do governments understand the value of aviation?
Generally speaking, I think they do now understand the value of the industry. But what they don’t understand is the complexity of the industry. And that is often combined with a strong national pride in having an airline. For the Seychelles, an isolated country, aviation is obviously vital. No one doubts that. But explaining the network rationale, pricing, distribution and revenue optimization is a much more difficult conversation. Airline margins and the overall impact on the economy have to be balanced if air travel is to be made sustainable.
The point is that connectivity comes at a price. To sustain an airline business, it must be run on economic metrics. But the industry is not always explained to the right people. There needs to be a more holistic approach from governments and the industry. It is not just about talking to a transport minister or technical experts.
Is technology the only way forward in improving the travel experience for the modern airline customer?
The human element will always be the most important. Flying is still a big deal for many people, especially emotionally. And it is humans that provide emotional support.
It’s also worth noting that the accessibility of air travel means all ages and all types of people fly. It’s hard to answer that with technology alone.
Of course, technology empowers staff as well as customers and that is vital. And the transactional side of the business has benefitted enormously from technology. It is easy, simple, and gives control to the customer. It also helps to improve predictability for the airline and the consistency of service.
Technology or humans, the focus has to be on the customer.
How important is Etihad to your airline and do they contribute beyond the equity stake and network cooperation?
Etihad has a 40% stake in the airline. Previously, there was a very close relationship. They had a lot of key staff here and we relied on them quite heavily.
Of course, we still collaborate in areas such as general staff training, and they support in maintaining our aircraft. Being able to take advantage of their network is crucial for us. At the same time, we’ve taken back several functions, including specifically crew training, flight planning and flight dispatch. We felt these were critical elements that needed to be controlled by Air Seychelles.
To be sustainable, we have to stand on our own two feet. Where outsourcing makes sense, Etihad will be one of the options considered.
Can smaller airlines survive in an increasingly competitive industry?
It can be tough if you’re a full-service carrier because there are no economies of scale and yet the airline needs to be compliant with the same regulations as everybody else and still find the investment to compete.
Fortunately for us, Seychelles is a beautiful country that will always have visitors and that gives us a demand to tap into. Stopping international long-haul reduces our exposure to global risks dramatically.
There is no doubt that industry consolidation will continue but niche carriers can survive on their own if they execute their business strategy well at a detailed level. Your house must be in order and your costs must be competitive. Every aspect must be aligned with your business model and strategy.
1977 Air Seychelles was founded following a merger of Air Mahe and Inter-Island Airways
7 aircraft make up the Air Seychelles fleet
7 destinations served by Air Seychelles across three continents
5 Air Seychelles is one of the five founding members of the Vanilla Alliance
If you could change one thing about the industry, what would it be and why?
The cost and complexity of distribution. New Distribution Capability is definitely helping but it is the entire legacy side of the business that has to change.
Airlines have to be quicker to market, they have to lower costs, and they have to offer a more personalized proposition. That is at the core of the business. But many airlines have a legacy mainframe and corresponding mindset that has been around for decades. Retail has set the bar high and customers now expect instant gratification. Airlines have to do something similar. They have to meet customer expectations and to do that, distribution must be radically overhauled.