Seychelles' financial committee examines future of Air Seychelles, impact of its precarious finances

The committee, which was set up in March 2016 is chaired by the Central Bank. (Seychelles News Agency)

(Seychelles News Agency) - The future of Air Seychelles and the impact of the airline's financial situation on government finances and the domestic economy was part of discussions held in a meeting of the Financial Stability Committee, the Central Bank said on Monday.

The Committee, which was set up in March 2016 and chaired by the Central Bank, held its second meeting for 2021 as members considered several ongoing and upcoming developments that could have potential implications for Seychelles' financial stability.

The Central Bank said that on the subject of Air Seychelles, the national carrier, "the members emphasised the urgency of establishing an unbiased position regarding the company's financial viability such that greater certainty can be set for all stakeholders involved."

Last Monday, the Seychelles' President Wavel Ramkalawan chaired an extraordinary virtual meeting of the Cabinet of Ministers at which the future of Air Seychelles was discussed.

The meeting followed a decision by the airline to lay off 11 of its pilots four months after the airline announced voluntary redundancy targeting older workers as part of its evaluation of its manpower plan in order to sustain its long-term operations.

According to the Central Bank, the Committee "acknowledged the consequential challenges stemming from the ongoing COVID-19 pandemic affecting the domestic economy, emphasising the current unemployment situation and its linkages to the domestic financial system."  

Other issues discussed included the need to devise clear strategies for phasing out the various policies and support mechanisms introduced to mitigate the impact of the pandemic as the domestic economy continues to recover.

An update on the performance of the Seychelles in regards to domestic and international developments was also provided during the meeting.

"The Committee concluded that although there are positive signs of economic recovery, on both domestic and international fronts, risks to financial stability remain, given the current dynamic and uncertain landscape. In light of this, the need for close collaboration between the relevant authorities remains vital to mitigate the ever-changing risks to domestic financial stability," said the Central Bank.

The economy of Seychelles, an archipelago in the western Indian Ocean that depends largely on tourism, was severely affected by a downturn in travel caused by the COVID-19 pandemic.

The island nation reopened its borders to all visitors on March 25 with the aim to relaunch its tourism industry.