Dr. Rajeev Bisasau, Chief Executive Officer of Air Seychelles, has been in Air Seychelles since 1997, starting out as Manager for Strategy, then General Manager, and Deputy Chief Executive. With a degree in Aeronautical Engineering from the City University in London, and a PhD in Air Transport from Frankfurt University, in addition to a profound knowledge of the airline turf, Dr. Bisasau is moving Air Seychelles to new areas of business away from the traditional dependence on tourism traffic. He also proffers panacea for African airlines facing safety, competition and other challenges.

Excerpts:

Q: Could you tell us what's new in Air Seychelles?

A: What is new in Air Seychelles is that we have embarked on an expansion plan. We used to have two aircraft; back in 2007, we had two 767-300s. But gradually we've moved onwards and right now we have five aircraft: three 767-300s and two 767-200s. And we operate them to Paris, London, Rome, Milan, Johannesburg, Mauritius and Singapore. We are also thinking of India and China. We also operate to the islands within Seychelles, with Twin Otter and Short-360 aircraft. Moreover, we do groundhandling at Seychelles. In terms of future prospects, we have two 787s coming in, hopefully, by 2013; and this is something that we are very much looking forward to. We have also revived our business class seats; so, we have a large capacity in our business class for the comfort of the passengers, and to compete with the likes of Emirates, Qatar Airways and other such airlines that operate into the Seychelles.

Q: What's your traffic figure like for 2010?

A: For 2010, we carried in the region of 100,000 passengers on our international network. And on the domestic network, we carried about 200, 000 passengers. In terms of revenue, our turnover was about 100 million Euros; we made about 6 million Euros in terms of cargo, with the rest coming from various activities like passengers and groundhandling.

Q: The presence of foreign airlines in Africa is increasing. What does this mean for African airlines?

A: I think the challenge is that Africa has a problem of accessing funds, and this makes it very difficult for us to develop our products. And foreign airlines, and would I say, airlines from the Middle East, act in a very predatory fashion.

They come with very high frequency; they put in a lot of capacity and they don't mind if they are losing money in the short-term or medium-term. And, in my opinion, they are out to take the business from Africa, and directly through their very hubs. Sometimes, we African carriers, and sometimes Air Seychelles as well, act as training grounds. We train locals as pilots. 95 per cent of our pilots, for example, are from Seychelles. We have a population of 80,000 people in Seychelles, and all our pilots and our cabin crew practically are from the Seychelles. But what we see is that Middle East carriers just come and take the best cabin crews, the best pilots and engineers. They will take the best accounting people, finance people. And if we are not very careful, this will be happening all over Africa. So, we are losing in terms of products, we are losing in terms of frequency and capacity, we are losing in terms of people, and then we don't have access to funds. As you can see, if we don't correct all of that, we'll run into disaster.

Q: So, how do you think this can be corrected?

A: I don't know about the whole of Africa. But, for us at Seychelles, we are trying to revive our products, which is why we have brought forth our new business class seats. We are going for the 787s, which will allow us to present a better product. We also focus on niche market so we could go direct to our destinations, while the competition has to go through hubs. We also focus on our marketing. We try to make people understand that when travelling on Air Seychelles, it is just Air Seychelles. We also try to work with the manufacturers and leasing companies to ease up on our funds and ensure that we spend our money wisely.

Q: Now looking at challenges in aviation security, how best do you think African airlines can address this issue?

A: When it comes to aviation security, it depends on the market you are operating in. For example, we are operating into Europe and we really have no choice than adapt to what is imposed on us. Some years ago when we had the 9/11, it was imposed on us that we had to put certain security facilities; we had to spend USD 100,000 on two aircraft to put those facilities. I think there is really no choice if we want to be competitive and abide by the regulations that have been set.

Q: What's your reaction to the EU Emissions Trading Scheme which is to become effective by 2012?

A: Personally, I think it is a big scam. This is practically close to robbery. And I think all the money that is going to be collected from this is not going to be used for environment. It is just going to finance the deficit of these countries who think that they just had to impose an additional tax on aviation and make more money. Very similar to the EU emissions trading, there are the Germany-imposed taxes and UK tax increases. And I think African airlines need to come together against these things in a really firm manner. Another issue is the European Community which tries to negotiate with each and every country, and tries to tell us that you have to accept any airline that comes from Europe (based on such agreement). Unfortunately, up until now, we don't seem to have a concise, focused and coordinated way of addressing them. We are fragmented (in Africa) and I think the Europeans and Americans take advantage of that.

Q: How would you assess the government support for African airlines given that many airlines are faced with increase in competition from outside?

A: It's a very difficult question because it is always the chicken and egg situation which we don't know how to get out of. You only get access to funds when you are doing well or highly profitable. I think African airlines have to convince the international community that they are being well-run. They have to convince the international community that they have commitment or support from their governments and they have to convince the international community that intervention from governments is minimal. I don't think there's anything wrong in having State-owned airlines. We are 100% State-owned, and we act on the government policy for the tourism sector. However, the government allows us to operate in a very commercial manner, which is appreciated by the banks, by Boeing, among others, and I think all the other companies can very much achieve that good example. And we are very appreciative in Seychelles because while the government want us 100% government-owned and give us the support, they do not actually micro-manage or interfere (in our operations).

Q: What do you think should be done to make capital available to African airlines?

A: Airlines operate in a very capital-intensive industry. And going for new aircraft is  very difficult. I really cannot speak for the whole of Africa, but from what we do in Air Seychelles, it is very difficult for us to raise financing to purchase aircraft. We have actually never purchased aircraft, but we go for leasing. We look at leasing companies that are prepared to work with us - we have a very good relationship with ILFC, and since 1989 we have been leasing aircraft from them. So, in Africa, we must not think of ourselves as assets managers. We do not say, for example, that we are going to buy an aircraft now, and in 20 years time we are going to make so much money out of it. No. We say we are in the business of carrying people; and we look at our cash flow and say this is the amount of money we can pay (for the aircraft), and we are going to get an aircraft at that price. And we feel leasing is the best, because when leasing we don't have to put huge deposits upfront; we don't have to go to banks. I think this is one way of actually getting access to aircraft.

Q: How would you assess safety in Africa in the last one year?

A: When I look at the statistics, it seems that there are some gradual improvements in terms of safety. As African airlines, we need to understand the reasons why there are such issues of safety and then tackle them as they come. At Air Seychelles, for example, we abide very much by the IOSA (International Air Transport Association Operational Safety Audit); we are IOSA-accredited. Safety is our primary concern, and we do not just pay lip service to it. We actually spend money; and it's at every level of the management of Air Seychelles. We cannot afford an accident, and I don't think any African airline can. It's a very expensive thing and we do not hope that this happens. African airlines can improve safety by gradually entering into the IOSA programme, getting the right people, and then spending the right money because, in difficult situations, there's a tendency (for airlines) to cut corners. And, when an airline cuts corners, safety performance is also cut. Safety is one of the things that have to be driven by continuous spending.

Q: How do you think that interconnectivity can be boosted within Africa?

A: There are many emerging markets. But, flying to such markets is an issue of money. Sometimes, people ask us why we don't operate to routes where they see potentials. However, the problem there is that it takes money to start a flight. It is a problem to actually tap into those markets when you don't have access to money. For example, for us to start a new flight into Moscow requires an investment of about 200,000 to 300, 000 Euros or maybe half a million Euros for marketing and other investments. I would love to have the aircraft flying various destinations; but by my calculation I'm going to make a loss of about $1 million in the first year, and then I start building in the second year. I cannot afford to lose $1 million dollars. It's as simple as that. But many airlines outside Africa have really deep pockets and they can afford to say 'in a year this is where we lose so much money, but eventually we'll gain it back.' That is why such markets fall into the hands of certain other carriers from outside Africa who can afford to lose money.

Q: What was your greatest challenge in Air Seychelles in 2010?

A: My greatest challenge in Air Seychelles in 2010 would be the Euro. We are very exposed to the Euro-Dollar exchange rates because most of our revenues are in Euro, and most of our costs are in dollars. When the Euro was at $1.45 or $1.5, it was quite good for us. I can afford a high fuel price, for instance, if I have a high Euro. Unfortunately, in 2010 we had a high fuel price and the Euro plummeted to about $1.2 to $1.19. It is very strange; when the dollar appreciates, the fuel price also appreciates, but it does not work the other way. So, when the Euro started coming down, the fuel price stayed at about $75 to $80. The Euro fell to about $1.1 to $1.2. This one now is the biggest challenge, and it affected our cash flow. I think what African airlines need to understand is all about cash flow; we need to stop focusing on profitability, we have to keep it at the back of our mind. We do not enter the market just to lose money. However, for me, the focus is do I have money to pay my bills at the end of the month? I think focusing on cash flow and managing that will lead to profitability.

Q: What is your projection for the African airline industry in 2011 in terms of increase in connectivity and profitability?

A: I think profitability will be very elusive. I think we only have few profitable airlines in Southern Sahara Africa such as Air Seychelles, Ethiopian Airlines and Kenya Airways, among others. Profitability is very elusive because fuel price is high, and we have the competition, which is not fair. Competition by the Middle-East carriers is unfair, in my opinion. And, I think that the Middle East carriers are there to kill. African airlines need to get their strategies right, and that is where to start from. In terms of safety, I do hope that for the sake of Africa and for the sake of African airlines' reputation, airlines in Africa should manage to build their safety record. Safety is also dependent on civil aviation authorities. We have a number of airlines, unfortunately, which act as flags of convenience. In terms of oversight on safety, sometimes they have certain deficiencies. It's not only about airlines, but it's also about how the oversight on safety is done. And this needs to be invested in.

There is the infrastructure as well which needs to be looked into. I hope for the best for Africa. However, it all depends on how the strategies are formulated. I think safety and other related aspects have to be raised to the highest level within the airlines.

Q: Do you think African airlines are cooperating well?

A: It is beginning. For example, we just signed a contract with LAM Mozambique. It is the first time we're doing this. We are going to fly twice a week between Maputo and Lisbon on their flight with our aircraft and our crew. It is a very good sign, and I think airlines in Africa can find certain avenues to do same.

I also proposed certain collaborative agreement to Air Zimbabwe. If one thinks about it we can find certain areas of collaboration, and I think they exist. It's just a question of sitting down and thinking about them and actually driving them. Sometimes we lack drivers - people who actually take ideas forward.