FLUG REVUE October 2005: Tunisair prepares for more competition

October 2005

TUNISAIR

By Dierk Wünsche

Tunisair's history is inextricably linked with developments in the north African country. When it was founded on 21 October 1948, Tunisia was still a French colony. Tunisair's first aircraft, a Douglas DC-3, was acquired from American military stocks. Later this was supplemented by larger Douglas DC-4's. After Tunisia won its independence, the young airline went through first a period of upheaval and then the transformation of Tunisia into a popular holiday destination. Non-stop flights from Tunis to Paris and Nice started up in 1956. In the capital city, the international airport of El Aouina commenced operations.

Two years later the airline began to appoint Tunisian nationals to key positions. The regular route service was consistently maintained. Initially the airline had its pilots and engineers trained in France and Morocco, and the first Tunisian women worked as flight attendants. On 2 September 1961 the jet age arrived at the airline when the first Aérospatiale Caravelle was deployed on the routes to Paris and Nice. In 1964 the airline entered the German market, and its first overseas offices were opened in Paris, Geneva, Frankfurt and Rome. By 1975 the number of charter flights had increased tenfold, with up to 756,000 passengers being carried each year. In the 1970s the Caravelles in the fleet were replaced by the more modern Boeing 727-200 (1972) and the first 737 (1979).

By the beginning of the 1980s, the airline's route network linked over 20 European countries with destinations throughout Tunisia. Then in 1982 the first Airbus A300 joined the fleet, and the network was expanded to include new destinations in the Middle East and Europe. As of the turn of the millennium, the carrier was achieving a utilisation of 77.1 percent and carrying up to 3 million passengers per year, despite growing competition. At the same time the fleet was upgraded, and the new A320, A319 and Boeing 737-500/600 types entered into service. However, the terrorist attacks of 2001 in the USA and 2002 in Djerba affected Tunisair badly: passenger numbers declined and did not recover fully until 2004.

The ownership structure of the airline is as follows: 74 percent of the shares are held by the government and state of Tunisia, 6 percent by Air France, and the remaining 20 percent are in private hands. The airline operates both scheduled and chartered services. Over 87 percent of its flights are to Europe, the three main markets being France, Italy and Germany. The airline flies to additional destinations in north Africa and the Middle East. Today Tunisair flies to 158 airports in 43 countries. For the current year the airline is expecting passenger growth of about 10 percent, with passenger numbers rising to some four million.

For its scheduled and chartered flights the aircraft, with their distinctive gazelle emblem on the tail unit, are configured either as two classes or as a single, Economy Class. Tunisair is a member of IATA and certified to the ISO 9002 and JAR 145 international quality standards. It has never had a single accident in its history. As of 2004, its workforce stood at 6,000 staff. It is remarkable that, of its 130 pilots, who have to be Tunisian nationals in order to be hired, eleven are women. Three women captains and eight first officers are currently on the payroll.

In an interview with FLUG REVUE, the director of German operations, Ali Miaoui, explained, “Tunisair's strength lies in its nationwide presence, which has been maintained despite the crisis. Our aircraft take off from 22 German airports for Tunisia's tourism centres. Thanks to the direct connections, passengers avoid long journeys and the inconvenience of having to transfer with long waiting times.”

On average its jets take off 35 times a week from German airports bound for north Africa, and at peak times frequencies are up to 80 per week. The airline has a 30 percent market share in the holiday sector, rising to 36 percent in the scheduled services. During the winter the accent is on scheduled services, while the summer season is dominated by the growth in chartered business.

Commenting on the development and market positioning of the airline, CEO Youssef Néji explained, “The geographic situation of Tunisia made Europe the natural direction of focus right from the start. Initially we operated purely guest worker flights to the European metropolises. Then, as the standard of living rose in Europe, holiday flights bound for Tunisia followed. These became ever more frequent and the number of departure airports increased steadily.”

Meanwhile the freight side of the business is also growing in importance. Thus Tunis Carthage airport is an important transfer point for freight exports from Africa towards Europe. Moreover, in the last few years Tunisair has opened up new markets in central and Eastern Europe. Thus, the summer 2005 flight schedule contains flights to Budapest, Prague, Warsaw and Belgrade, while Slovenia and Bulgaria are additional options. The company also wants to develop new routes in Africa and the Middle East so as to boost its market presence there as well.

The CEO of Tunisair sees the challenges of the future as follows: “Air transport is currently undergoing a difficult phase. Liberalisation of the Arabian sky in 2006 will put us in a competition situation. Up to now we have been protected by the Tunisian state. But now we have to fly alone. On top of that the cost of kerosene has shot up. Confronted by these challenges, we have to get ourselves into shape so as to maintain our market share against private competitors, as we want to remain the number one in Tunisian air transport. Our customers and partners will continue to be offered quality products at attractive prices with the very best safety standards.”

2004 was apparently a good year for the company, with both passenger numbers and profits increasing. Passenger numbers are expected to rise by around ten percent in 2005, reaching the four million mark. The company owes its success not least to its reorganisation and restructuring phase, and the hiving off of its ground services, onboard provisioning and engineering divisions plus the Amadeus reservation system are already delivering results. This year the airline even expects last year's positive results to be surpassed. Hence the challenges for the coming months are: continuing improvement of service quality, improvement of punctuality figures and general cost-reduction so as to offer customers a fare that is competitive vis-à-vis the competition. The measures include rationalisation of staffing levels. Last year 1206 staff left the company voluntarily. The airline also plans to continue to implement the JAR 145 standards, and at the end of October its flying and ground operations will be certified to the ISO quality standards. In partnership with other airlines Tunisia has also set up a training centre of its own and is set to commence training and continuation training of pilots, crew and technicians in its home country. These facilities are to be commercialised and to be offered to other airlines as well. At the same time further progress is expected in the areas of e-ticketing (this will initially be introduced on the route between Tunis and Marseilles) and e-commerce. On top of this there are plans to improve the domestic and foreign sales systems.

Technical maintenance of its fleet, from line maintenance through to complete D checks, is performed by Tunisair in its own hangar at Tunis Carthage airport. On this point, Mohames Thamri, Directeur Central Technique and Senior VP Engineering and Maintenance, explains, “Our engineering arm, which operates as a financially independent company, has a hangar of over 8,000m² at the airport in addition to numerous service and warehouse buildings. This can accommodate five A320's or two A300-600's plus one Boeing 737. We perform line maintenance work for other airlines, such as Lufthansa, Air France and Turkish Airlines. The engines for our entire Airbus fleet are maintained by Tunisair/Lufthansa Technik, and those of the Boeing 737 fleet by Lufthansa Technik. Moreover, in June 2005 we shall be entering into an even closer partnership with Lufthansa Technik.”

Thamri continues: “With our 950 staff, we cover the entire spectrum of engineering, maintenance, training and quality assurance. Between 22,000 and 250,000 man-hours of work are performed in our company every year. Of these, seven percent are for our customers and 93 percent for Tunisair's 29 jets. Our top priority is to invest in the safety of flying operations. Only then do considerations such as cost, comfort or measures aimed at improving our prestige come into play.”

From page 28 of FLUG REVUE 10/2005

Last updated 14 September 2005

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