Thursday, November 8, 2012

■ TUNISIA: Tunisair plans massive layoffs after posting $98m loss for 2011.

TunisairFollowing its AGM last night in the Tunisian capital, Tunis, Tunisair's boss (TU) has officially outlined controversial plans to restructure the state-owned airline after it declared a whooping USD98.3million (EUR77.2million) loss for 2011. The move is certain to earn it the wrath of its powerful unions who, in the past, have played a pivotal role in protecting the carrier from both local and foreign competition.

"The number of passengers transported last year decreased 14% compared to 2010. The number of seats made available by the airline also went down 14.8%, along with a very important indicator, the number of hours flown, which went down 15.3%. The only positive result was the number of seats filled which registered a modest increase of 0.2%.

The negative context was further aggravated by losses in other sectors due to higher gas prices which went up 32%, a 14.8 percent increase of capital allowances and the airline's insurance costs which went up 38.6%. The rental of airplanes went down 89%.

A Tunisair A350 (Airbus SAS)
A Tunisair A350 (Airbus SAS)
During the AGM, Director and Secretary General of Tunisair, Rebah Jrad, called on the Government to provide a bail out which the struggling carrier will use to streamline both its bloated workforce and its aging fleet. However, any subsequent bailout plan will require government approval, as TU's long term  financial viability will also have to take into consideration the possibility of an Open Skies agreement with the European Union, currently being negotiated.

Additionally, Tunisair will have to deal with its unions who recently staged massive protests over the signing of an Open Skies agreement with Qatar, arguing that 5th Freedom rights granted to Qatar Airways (QR) would unfairly advantage the Qatari carrier at Tunisair's expense.

At present, Tunisair's fleet consists of 32 aircraft whose ages range between 8 and 21 years: two Airbus A300s, four A319s, fifteen A320s and eleven Boeing 737-500s/600s). In 2008, a fleet rejuvenation project was launched involving the purchase of 16 aircraft over 12 years and the gradual withdrawal of airplanes whose age exceeded 20 years. Thus far, three new Airbus A320s have arrived while in the next few years,  seven other A320s, three A330 and three A350s are set to be delivered.

Should Jrad's plan gain governmental support, layoffs are expected in 2013, though that is all dependent on union support.