Where is Air Seychelles Heading?

This newspaper has finally obtained a copy of the “super secret” report made by the Chairman of Air Seychelles, Captain David Savy for the year ending 31st March 2005, exactly one year ago today. The report contains the audited financial statement and other information which makes interesting reading.

The intrigue we had to go through to obtain a copy of Captain Savy's report is a story in itself which will be told at a later date. Suffice to say that it included a clandestine trip to Dubai, replete with secret codes and drop zones worthy of the recent British Secret Service supposed escapades in Moscow. It appears that less than 1% of the staff of Air Seychelles has seen the report.

The report, our readers would be enthused to know, is contained in a glossy book printed in Dubai. It appears that while the Seychelles Civil Aviation Authority was given a dummy copy, according to our information, as far back as November 2005, we the general public who legally owns the airline had to make do with snippets of information provided by Captain David Savy to the government owned media.

As things stands, we will not know anything about the financial affairs of the state owned airline for the year ending March 31, 2006 until probably in November when Captain Savy will appear once again on television to give us bits and pieces of selective information. For whatever it is worth, we await any snippets of information with bated breath until the glossy copy could be secretly ferreted out sometime in March 2007.

The report revealed that, while the airline made an operating profit of € 305,000 after tax, it also wrote off € 793,000 of bad debts. But Air Seychelles has caused total confusion by reporting their financial statements in Euro rather than our national currency, the rupee. As a result it makes comparison with the previous year very difficult. But the move is evidence, if evidence is needed, that our currency is no longer worth anything in the international arena.

According to the report, Air Seychelles carried 496,812 passengers during the year under review. When compared to the net operating profit, each bum carried by the airline generated only € 0.64 or SR R4.61 of profit for the airline. According to the report, by 2007 Air Seychelles can choose to buy the Boeing 767 aircraft from the US leasing company. For that it will have to find € 46m in the form of balloon payment. At that rate of profit making, it will never be able to exercise that option.

Interestingly enough, € 46m is SR 331m using Air Seychelles' own internal currency conversion rate. 10 times that amount of money which is sitting in commercial banks have been loaned by the banks to the government. And our Ministry of Finance has claimed that our government made a surplus of over SR 300m at the end of 2005. If only our currency was convertible, all those depositors could have used their rupees to buy a stake in a state of the art Boeing  767 and earn the fees in US dollars which will be paid by Air Seychelles to the American leasing company until 2011.

But the most interesting information glimpsed from the glossy copy we have obtained is the salary increase Captain Savy has paid himself during the financial year covered by the report. Captain Savy paid himself the princely sum of SR 445,000 as an annual salary, for the privilege of providing our national airline with his commercial acumen, experience and management skills. This salary matches that of the expatriate MD of Seychelles Breweries and the expatriate CEO of Cable and Wireless. Mr. Savy's salary was almost twice as much as that of the President of the Republic.

But most interestingly during the year in review, Captain Savy paid himself a salary increase of SR28, 000 over the previous financial year. SR 28,000 is equivalent to employing a fish cleaner at IOT or two home-carers for a year. The average wage in Seychelles during 2005 was SR 3,300. The year before he paid himself a salary increase SR18, 000. The report does not say why Captain Savy needed to get a wage rise.

But Captain Savy is not the only one connected with the management of the Airline who got a hefty salary increase last year. The other six members of the company's Board of Directors saw their annual fees rise from SR 1,000 to SR 7,200 per person. Five of the six Board members of the airline were civil servants, which included the Governor of the Central Bank, who was also the Principal Secretary of the Ministry of Finance until January this year.

Our national airline and flag carrier, like our country, is operating on a shoe string. Like our country, our airline is steeped in debt to foreigners. But unlike our country it can give back the two long haul aircraft to settle most of its debt.

Seychelles Weekly, March 31, 2006