Tunisair in turmoil

Picture: AIRBUS

For nearly three quarters of a century – since its foundation in 1948 – Tunisair has contributed hugely to Tunisia’s tourism industry. Anuradha Deenapanray and Vincent Chappard report.

However, in recent years, even before the ongoing Covid-19 crisis, the carrier has been experiencing financial turmoil.

Last year, the airline recorded a 70% drop in revenue, while the number of passengers across all activities fell by 80% and its transport revenues by 77%, despite an improvement in the average revenue per passenger of 13% for scheduled flights.

Tunisia’s new minister of transport and logistics, Moez Chakchouk, is currently treating the restructuring of the airline as a major priority, before considering how any relaunch might work.

In mid-February he admitted: “Tunisair is in great financial difficulty and we are unable to pay salaries or to honour our commitments to suppliers.”

The minister also said that the restructuring plan drawn up in agreement with the UGTT – the Tunisian general labour union – had not been fully implemented. Industry observers believe this to be one of the major causes of the airline’s current instability.

According to the minister, state intervention is vital and he ruled out both privatisation of Tunisair, or any recourse to a strategic partner.

In early January, the appointment of Olfa Hamdi as Tunisair’s new CEO, to replace Elyes Mnaki, had brought signs of hope. The new CEO’s mission was ‘to develop a strategic action plan to save and promote Tunisair in order to face international competition’, especially from European and African companies.

Hamdi also established a new strategic committee of independent advisors, made up of nine senior players from the local and international aviation world. But it was soon clear that the crisis was far from stabilising.

On February 18 TAV Tunisie, a local subsidiary of the Turkish company, TAV Airports, that manages the Tunisian airports of Enfidha-Hammamet and Monastir Habib Bourguiba, announced the seizure of €8 million ($9.65m) from Tunisair, partially to cover a debt estimated at €20 million, excluding penalty costs, that dated from 2015.

On the following day the minister organised a crisis meeting, in the presence of Hamdi, representatives of TAV Tunisia, and the Office of Civil Aviation and Airports (OACA), to address the financial dispute.

At midday that day, the UGTT called a strike during protests at the company’s headquarters in Tunis. Its secretary general, Nourredine Taboudi, called for a rescue plan and rejection of privatisation.

After long discussions, the transport minister gave hope with the announcement of an agreement between Tunisair and TAV Tunisia on the rescheduling of the debt and the payment of social contributions of OACA agents.

However, just three days later, on February 22, there was a dramatic turn of events when Hamdi was dismissed.

Chakchouk explained the decision to dismiss Hamdi, only seven weeks after her appointment, by saying that she had “made many mistakes and also disclosed confidential documents”.

The day before, Hamdi had responded to attacks by the UGTT union on her Facebook account: “I refused to award a financial advance and I counted on Mr Noureddine’s understanding of the difficult situation of the company” she wrote, stressing that a strike would have a major effect on Tunisair.

At the beginning of March, Khaled Chelly took over the management of Tunisair.

The new CEO was, notably, deputy managing director of the national airline between 2012 and 2014 and managing director of the Tunisian Civil Aviation and Airports Authority (OACA).

He now has the difficult task of getting Tunisair out of the crisis.