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Sat 17 Mar 2012 09:52 AM

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Etihad expects Air Seychelles profit in 24 months

Abu Dhabi carrier's CEO says second round of job cuts planned in next few weeks

Etihad expects Air Seychelles profit in 24 months
Etihad Airways signed an agreement to take a 40 percent stake in Air Seychelles.

Air Seychelles will return to profit in 24 months after a restructuring that will involve more job cuts, James Hogan, the chief executive officer of Etihad Airways has said.

A second round of job cuts will take place in the next six weeks after consultations with workers, Hogan told reporters in Victoria, Bloomberg reported. In January the former management of the airline fired 166 workers.

Etihad owns 40 percent of Air Seychelles and has a five-year management contract of the island’s national airline.

Hogan said: "Air Seychelles is a strong business proposition and Etihad Airways will do everything we can to ensure it achieves sustainable growth while offering passengers best in class service.

"When we partnered with Air Seychelles we made a commitment to support Air Seychelles' quest to emerge as a viable airline offering world class service commensurate with that being offered by Etihad Airways. The business plan we presented is the tangible result of that commitment.

"It makes strong commercial sense for us to work together on issues where cooperation is possible. The resulting synergies will bring about significant efficiency benefits for both Etihad and Air Seychelles."

Air Seychelles launched new direct flights from Mahé to Abu Dhabi on March 12 as part of Etihad's deal.

Complementing Etihad's four weekly services from Abu Dhabi to Mahé, Air Seychelles will offer twice weekly flights.

The new schedule will increase to seven flights per week from June.

Etihad Airways started services to the Seychelles on November 2 last year.

Etihad will invest $20m in the Indian Ocean carrier, to be matched by the Seychelles government, and will also provide a $25m loan to meet working capital requirements and fund network development.

The agreement was Etihad Airways’ second equity investment, following its December announcement that it would increase its stake in Air Berlin to 29.21 percent, making it the single biggest shareholder in Europe’s sixth largest airline.

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