Monday, July 22, 2013

■ TUNISIA: Government rolls out Tunisair's turnaround plan; approves initial funding for A320s.

TunisairThe Tunisian national assembly has approved a bill allowing national carrier, Tunisair (TU), to secure EUR74million in funding for the acquisition of its ten Airbus A320 necessary for its renewal plan. The move is part of a raft of measures laid down by Tunis to help the struggling airline return to profitability following the events of the last three years which saw Tunisia's tourism numbers plummet.

Tunisair A320
Tunisair A320 (Tunisair)
According to AeroTunisie, other aspects of the turnaround plan include:
  • An advance of USD180.59million (TND300million) from the sale of two former Tunisian Presidential Jets; an Airbus A340-500 (MSN 902 | TS-KRT) and a Boeing 737-700 (MSN 29149 | TS-IOO); one of which The African Aviation Tribune helped to facilitate. 
  • The granting of USD25.3million (TND42million) in VAT returns from the Ministry of Finance;
  • The writing off of USD108.3 million(TND180 million) in unpaid debts to the Tunisian Civil Aviation and Airports Authority (Office de l'Aviation Civile et des Aéroports, OACA);
  • The waiver of all penalties for late debt repayments;
  • The granting of a 10% annual fuel subsidy valued at USD30.1million (TND50million) per annum;
  • A USD3.6million (TND5million) subsidy for domestic air transport;
  • Payment of operating expenses for the Presidential Jet for 10 years, estimated at USD33.1million (TND55million);
  • An increase in working capital from USD60.2million (TND100million) to USD108.2million (TND180million);
  • Setting up of a USD15.1million (TND25 million) compensation fund to pay for the laying off of 1'700 employees;
  • Tax Exemption status as well as protection from the sale of any land or property belonging to the carrier (likely as a means of warding off creditors).
In addition, various legal and structural changes to the company will be made including the creation of a global management consulting firm (Tunisair International Consulting) while legally several laws will be changed including those that govern the employment of pilots.

Meanwhile, competitor Syphax Airlines' boss, Mohammed Frikha, has said the maintenance of his airline's A330-200, recently awarded its airworthiness certificate by the Tunisian authorities, has been entrusted to Air France. The French carrier has reportedly placed an A330 at Syphax's disposal should an technical problems be encountered. Such is the distrust between Syphax and Tunisair that Mr Frikha claimed any contract signed with Tunisair would "likely not be honoured."