Overcapacity to under-utilised: the strange twist of fate of Argentina’s Airports

Overcapacity to under-utilised: the strange twist of fate of Argentina’s Airports

The Ministro Pistarini International Airport in Buenos Aires, Argentina

Argentina is a vast country, reaching nearly all the way to the South Pole (or at least, cold enough to feel like it), deep within South America to the Andes, and far north to touch the jungle shores of Brazil. It makes sense that aviation would play a critical role, with over 100 airports and airstrips across the country.

Moreover, as part of the plan to deregulate Argentinan aviation back in 2017, the airports themselves were scheduled to receive extra attention. The government planned to invest a combined $1.4 billion US to ensure that its airport infrastructure was up to code and met international standards. The question in 2021 remains, did this have the desired effect?

The airports of Buenos Aires

Starting with the top two most popular airports in the country, Buenos Aires Ministro Pistarini Airport (EZE) and Buenos Aires Jorge Newbery Airport (AFP) that serve the biggest city in the country. Pistarini is considered the major hub (like Heathrow), catering to Aerolineas Argentinas and was the hub of LATAM – as well as most other international arrivals.

Jorge Newbery Airport is the second busiest airport in the country, and is the low-cost hub for the country, with the likes of JetSmart and the failed Norwegian Air Argentina basing themselves there.

There is a third airport serving Buenos Aires, El Palomar Airport (EPA). Its located a bit outside of the city (20km) and is the entryway for low-cost carriers like FlyBondi for domestic routes in the country. This airport focuses on lower fees than the other two in an effort to attract local business, as well as being connected to other cities nearby like Zarate and Rosario.

Buenos Aires and the Coronavirus

In 2021, Ministro Pistarini Airport was declared the only airport in the city that could run scheduled operations – the rest of the Buenos Aires airport network remains shut down thanks to the Coronavirus, with airlines forced to operate exclusively on its twin runways.

Buenos Aires Ministro Pistarini Airport is the only one where measures and processes have been adapted to meet the demand in safe conditions.” – Organismo Regulador del Sistema Nacional de Aeropuertos – ORSNA

This has resulted in plenty of frustration from carriers such as FlyBondi, who rely on the other airports (such as below) to run low-cost operations. They even pointed out that El Palomar Airport has been operating perfectly fine for charter, repatriation, and military flights.

“despite the fact that scheduled flights in Argentina are already enabled, there is no official notification from the aeronautical organizations that restrict operations at El Palomar.” – FlyBondi statement.

The case is before the Ministry of Transport, but this failure to approve flight plans has already cost the airline dearly and forced them to fly out of Ministro Pistarini Airport instead. 

What about other airports in the country?

Other airports of note include the following (in order of passenger traffic):

Cordoba Airport (COR) – The biggest airport outside of Buenos Aries (and bigger than El Palomar), this airport serves the city of Cordoba. It has international routes (in good times) to North America and Europe.

Mendoza Airport (MDZ) – The fourth busiest airport in the country has multiple names, such as El Plumerillo Airport and Governor Francisco Gabrielli International Airport. It serves the Cuyo region, with cities like San Luis, San Juan, and Uco Valley. It is an international airport, but less popular than Cordoba Airport.

San Carlos de Bariloche Airport (BRC) – Serving the Rio Negro province (and San Carlos), this airport like Cordoba is international and facilitates flights from around South America.

Iguazu Airport (IGR) – The airport that serves the famous falls (Iguazu Falls), it is located on the border to Argentina’s northern neighbor Brazil (and serves the Brazilian city Foz do Igaucu). Because of its international nature, the airport has plenty of connections to Brazil and Chile, with plenty of access to low-cost carriers.

Salta Airport (SLA) – Also known as El Aybal Airport, this facility serves the city of Salta and had 1.4 million passengers in 2019.

Tucuman Airport (TUC) – The last airport on this list that just had shy of one million passengers in 2019, this international airport serves the province of the same name. It has links to several other nations (in good times).

Ushuaia Airport (USH) – A special mention for this list as its the southernmost airport in the country in icy Patagonia. It is only 4km from the city and is the main access to the fantastic Tierra del Fuego National Park. It doesn’t have much in the way of carriers operating to the airport (even more so after the departure of LATAM Argentina), but its location and popularity cannot be missed.

What was the government’s airport plan?

Before deregulation the government decreed aviation an essential service and for a long time, controlled the price to ensure access to the people. However, having a minimum and maximum price of tickets resulted in a restriction of seat availability, and thus the industry was stifled.

To correct this equation, the government removed the price restrictions and allowed airlines to set their own prices (and allow new competition to enter the environment), believing that the invisible hand of the market would change things for the better. However, this was not the case, and you can read about it here. 

Unleashing airlines was only half of the equation, with airport investment making up a substantial play for the government. With more air traffic on the way, they had to ensure that airports wouldn’t be the weak link in the chain.

“We have developed an ambitious project for 43 airports”. The project includes 223 interventions over the next 3.5 years” – Minister of Transport Mario Meoni, via Fundacion Mediterranea’s official YouTube channel

The $1.4 billion US investment was targeted to the following:

  • Doubling the domestic passengers by 2025, investing in domestic air links, improving regional airports and sponsoring routes.
  • Increase the commercial capacity of remote regional airports to supplement the lack of rail capacity – especially for agriculture.
  • Expansion of Ministro Pistarini International Airport.
  • Investment in the visa process to encourage more visits.
  • An additional $2 billion US for private tourism-based business.

“The best way to improve the experience of visitors is improving the quality of transportation. Argentina is a huge country and you have to take flights,” Sebastián Slobayen, head of Tourism said back in 2018 “We are investing in the runways and equipment to be sure the quality and timing of the trips will be OK. It’s one of our main strategies.”

The new reality of the Coronavirus

For a moment there, it seemed that the airport investment may have paid off. Projects were starting to complete, and thanks to a weak peso, Argentina was about to have a tourism boom.

But these plans have changed thanks to the Coronavirus, with airports facilitating far less passengers and aircraft. Take for example Buenos Aries: with three airports, the city has too many airstrips for the few flights arriving per day. It could even be argued that with the lockdown in place, the city could be served by a single runway. The other unutilised airports must still be maintained during this time, to ensure that facilities remain operational and capable of returning to service when travel restrictions are lifted. This means that their operating costs will need to be subsidised until they can open again, and it is uncertain as to when they will be able to resume normal operations.

Thus Argentina’s airports will need to be carefully managed, and the government may need to revise its investment plans. This could mean that certain facilities remain as is, whilst specific upgrades are prioritised over others. But no matter how the government proceeds with its development plans, we are not likely to see such a massive investment into Argentina’s airport infrastructure for many years to come – at least not until the country’s tourism industry sees significant growth, and this can only happen once the Coronavirus threat is properly eradicated.

 

Argentina Airlines: Has Deregulation Made The Industry Better?

Argentina Airlines: Has Deregulation Made The Industry Better?

Aerolíneas Argentinas, created in 1949, remains Argentina’s largest airline and the country’s flag carrier

Argentina, a vast mountainous paradise, took steps to deregulate its aviation industry in recent years – opening up the market to new carriers, international brands, and unleashing state airlines. But has this move actually allowed to lower the ticket prices in the country? Have these airlines been able to leverage a more profitable status quo? Or has the whole process been a blunder? Let’s explore Argentina’s diverse and developing aviation landscape, its airlines, and its industry casualties, in today’s article.

Who are the main commercial carriers of Argentina?

There are several key players in the Argentina aviation game.

  • Aerolíneas Argentinas is the national carrier of Argentina (initially national, then privatized, and then renationalized in 2008), operating a fleet of 54 aircraft. This fleet is surprising: either A330-200s (10) or Boeing 737 aircraft (44), a streamlined fleet mix that would make any airline jealous. Aerolineas is just completing a merger of sister airline Austral, incorporating the regional Embraer aircraft into the fleet in an effort to save $100 million in operations per year. Lastly, Aerolineas has eight Boeing 737 MAX on order and plans to resume operating the existing five in its fleet by the second quarter of this year.
  • Andes Líneas Aéreas – Originally a charter airline, Andes Líneas Aéreas entered the commercial aviation scene in 2017 in preparation for the deregulation of the industry and even expanded to include its first modern aircraft – an ex-Malaysian Boeing 737.
  • Flybondi – A low-cost carrier founded in 2017 in order to enter the market during deregulation, with a fleet of five Boeing 737s. The Bondi part of the name is a slang term for bus.
  • JetSmart Argentina – The local branch of the bigger Chilien JetSmart family (and part of the bigger Indigo Partners group). It was initially a start-up called Southern Wing Airlines, but after a failed attempted to become certified in 2017 was bought by the larger JetSmart as an entry to the newly deregulated market.  It has four Airbus A320s.
  • LADE – A special airline operated by the Argentian airforce, Líneas Aéreas del Estado (LADE), operates regional routes throughout Patagonia to ensure connectivity between remote regions. Technically it only has a small fleet of four Saab 340s, but it also has cargo aircraft for freight routes and operates the presidential fleet.
  • LATAM Airlines Argentina – This airline previously ran a large operation in the country and competed directly against Aerolineas. However, since the primarily LATAM airline went bankrupt in 2020, the local carrier has become a ghost and vanished from the airports of the state. There are plans for it to return (via other group affiliates) when market conditions improve.

“Argentina has always been a fundamental country for the group and will remain so, with LATAM’s other affiliates continuing to connect passengers from Argentina with Latin America and the world (…) The announcement is a result of current market conditions, exacerbated by the impact of the COVID-19 pandemic and the difficulty of building structural agreements with local industry actors, which has made it impossible to foresee a viable and sustainable long-term project,” Roberto Alvo, CEO of LATAM Airlines Group, said in a statement.

The last airline to mention isn’t on this list, but it would have been at the time of deregulation. Norwegian Airlines Argentina, a branch of the huge low-cost carrier in Europe, had aspirations to enter the country. It arrived with four Boeing 737s, but actually withdrew before the launch date as the main European airline ran into hard times back north. Since withdrawing from the market in December of 2019, its aircraft and operations were rebranded as part of JetSmart Argentina who, following the market uncertainty this year, chose to store the aircraft.

Why did Argentina choose to deregulate the industry?

Back in 2016, Argentina’s aviation industry was stagnating. Commercial operations were dipping into the red, and demand was at an all-time low. This was because the industry in the country was fully regulated, with the government giving final sign off on routes, aircraft, and most importantly, price. Airlines were not able to sell tickets below a certain price (called a price floor), ensuring that legacy carriers maintained a certain level of profit and that no newcomer (domestic or international) could undercut a state airline.

However, the issue came to a head in recent years when passenger numbers fell thanks to a dwindling local currency. As passengers paid for tickets in local pesos, but airlines paid operation costs in US dollars, ticket prices rose while wages lowered. This drove demand to all-time lows and caused a crisis, with even the national carrier facing a loss of $90 million.

Thus the government decided to step in to save the industry and local carrier Aerolíneas Argentinas. Spearheaded by Argentinian President Mauricio Macri, the plan was called the “Revolución de Los aviones” and would fix the problems by removing the price floor of the industry. Officials believed that without a price floor, airlines could match what passengers were willing to pay and spur demand to profitable levels. Tickets could be had for any price, as long as they were thirty days in advance and were a return trip. To help things along, the government would also invest a total of  $1.5 billion over the next three years (2017 to 2020) to fix up airports and grease the wheels of the industry.

On the eve of August 1, 2018, Argentina flicked the switch and everything changed. Airlines were now free of the price restraint and able to offer fares for as low as $20 US. Passengers snapped up over 100,000 tickets overnight, breaking websites and setting records. By June 2019, about 1.2 million passengers flew on internal revenue-generating flights, up 26% year on year. For Argentina, it looked like that the ‘Aviation Revolution’ was a huge success.

What was the true impact of deregulation?

Flash forward two years later and by the start of 2020 (pre-coronavirus), the airline industry had not only failed to properly start, but was even sliding backward. Of the airlines that had flourished since that winter’s morning in August 2018, only a few had broke even with some even closing up shop.

When the government deregulated the pricing of tickets in Argentina, they failed to realize just how cut-throat these airlines would be. Aerolíneas Argentinas for example was having a loss of around $6 per passenger at a ticket price of $20. Demand was high, but they were not making any money. While this an interesting promotional strategy, when you add in falling economic wages the situation became much worse. As the peso fell against the US dollar, the leasing payments for airlines went up for their aircraft (lessors are paid in Euros or USD, not Argentian Pesos). That $6 loss per person slowly became $7, then $8, and so on. Soon the airlines had no money to pay lessors and had to return aircraft. With no seats to sell, they made even less and began an inescapable downward spiral. Then, of course, the industry was hit by the Coronavirus crisis.

For flag carrier Aerolineas, these impacts amounted to a colossal loss of $489 million in 2018 and $680 million in 2019 – a far cry from the loss of $90 million they were trying to avoid. The carrier paused all operations until September of 2020 and had to default on loans it owed. The government had to step in with a huge $880 million bailout to save the airline, with plans for several restructures for profitability by 2022.

“We’re planning to curb structural losses in a sustained way from 2022 onwards. That’s the reasonable horizon in this situation,” president Luis Pablo Ceriani told Bloomberg on May 31 last year. 

Other airlines like FlyBondi reduced their fleet dramatically. While it had plans when times were good to expand up to ten aircraft toward the end of 2020, it has since reduced operations down to two aircraft – one of which is undergoing maintenance abroad and may not return anytime soon. JetSmart has managed to survive thanks to its Indigo Partners connection, but it needs to hibernate until operations resume. Andes Líneas Aéreas has had to severely reduce its fleet to four MD-83s to maintain a foothold in the industry, as interest rates on renting the new aircraft were much too high. Lastly, Norwegian and LATAM have withdrawn completely from the market (as listed above).

Time to heal for an industry in crisis

Perhaps the current crisis in 2021 has given the industry the reset it needs – causing companies with weak financial backing (that may have been propped up by the government) to collapse, and those with a more solid business model to survive. Come to the end of the crisis, there will be breathing room and enough demand for the remaining few to slowly return to growth. But until the bigger political, economical, and social problems are solved in the country, any airline trying to thrive in Argentina will only be able to tread water.

“When a competitor leaves the market, it creates opportunities for those who remain. But we’re still dealing with a crisis. LATAM had around a 15% market share in Argentina, and demand will only reach 50% by December 2020… Today, our priority is to take care of our operations in Chile and Peru. This is not a moment to start adventures in other countries which would mean two years of losses,” Chief Executive Holger Paulmann of Chilean airline SKY told El Cronista business daily.

How Are Aircraft Stored During The Aviation Crisis?

How Are Aircraft Stored During The Aviation Crisis?

VIM Airlines Airbus A330-200 stored at Teruel Airport, Spain in August 2020

With fewer passengers flying this year, airlines have found themselves with a bit of an oversupply of aircraft – 16,000 too many aircraft to be exact. According to aviation industry researcher Cirium, back in April of last year, 62% of the world’s aircraft were grounded. Too many airlines have state-of-the-art flying machines that have nowhere to go and all day to get there, and thus, need to be put into storage. But how do you store a multimillion-dollar piece of hardware, and what are the processes to eventually return it to service? Let us explore.

Stage 1: Choosing where to store the aircraft

While deciding to take an airframe out of flight operations is easy, it is much harder to choose where to put it.

Most modern airports, located in dense urban areas, are not designed for long term storage nor do they even have the room to relocate more than a handful of grounded aircraft. Plus, as many airports are privately owned they can charge whatever they like to the airlines with grounded aircraft, with some charging up to $1000 per plane per day. Although many have offered space for free as they know this crisis will be relatively short-lived (such as Schiphol, who are not charging KLM any parking fees). If a major airport is ruled out, then airlines will need to find a regional airport to store the planes, that has enough room (or is willing to shut down an extra runway) and has the required support to maintain an aircraft long term.

25 Scoot and 3 SIA aircraft parked at Changi’s ‘South Apron’ parking area during the COVID crisis. (Photo: Changi Airport)

The location of the airport is also important. While there are many suitable airports around the world, those airlines that operate in hot, cold, or humid countries might have to store their planes elsewhere to avoid the effects of poor weather (humidity can make short work of electronics). For example, Singapore Airlines has chosen to store the majority of its widebody fleet in the middle of the Australian outback in Alice Springs. The dry weather in the desert (it rarely rains) makes it perfect for keeping an aircraft electronics in top condition for as long as possible, and the lack of major storms like blizzards and hurricanes makes damage incredibly rare. Other airlines have followed suit, like Qantas, who have put their A380s into deep storage in the American desert.

“The A380s have to remain on the ground for at least three years until we see those international volumes brought back,” Alan Joyce, the Qantas CEO said. “The aircraft is being put into the Mojave Desert, where the environment protects the aircraft because we have the intention at the right time to restart them, but that is a considerable amount of time away.”

Stage 2: Storage Challenges

Simply parking the aircraft in the middle of a desert won’t keep the plane safe for very long, and any type of park for longer than a day or two, could do irreversible damage if the plane is not prepared. When the aircraft is inducted to the storage, several different things happen:

  • All the windows and doors are taped up and sealed – to keep in special gas that prevents corrosion, prevents sunlight from damaging the interior, and preventing little furry animals from making a home in the fuselage.
  • Engines and fuel tanks are emptied and filled with chemicals to keep them lubricated for a long time period. Engines themselves have giant silica packs inserted to prevent any moisture from pooling.
  • Aircraft controls are disconnected from the batteries
  • Wheels are locked to prevent the aircraft from moving in the wind
  • Seats inside are covered with plastic to ensure that they are still factory fresh when the plane returns.

“It’s quite a process to put the aircraft into storage, (but) once the storage induction check is complete, we’ll then start carrying out the periodic checks every week,” Asia Pacific Aircraft Storage (APAS), director Tom Vincent told the ABC.

Engineers will go over each plane’s vitals every week and will go as far as to spin up all the aircraft batteries and engines. This keeps not only the machinery humming but also ensures that the aircraft can fly at a moment’s notice – a special feat considering some airlines like Qantas intend to have aircraft in storage for three years. Lastly, engineers will need to actually move the planes once a week to prevent the tires from compressing and changing shape under the heavy load.

Stage 3: Returning to service

To bring a plane back out from the cold is just as extensive if not more than the initial storage. For a larger plane like the Airbus A380 aircraft, a crew of at least five engineers working around the clock for 24 hours is required to get the aircraft out as quickly as possible. Once the plane is technically ready to fly, it is up to a team of 200 cleaners to move through the cabin (and the outside of the plane), scrubbing surfaces, replacing seat covers, and deep shampooing the carpet.

According to Boeing, there are several dangers that an airline needs to watch out for when returning an aircraft to service:

Because of airplane system inactivity and the lack of regular maintenance checks during parking, the following may also occur: component mechanisms may lose lubrication, batteries may discharge, contamination of potable water systems or fuel tanks may occur, and some systems or components (such as oxygen cylinders, tires, hydraulic systems, and landing gear shock struts) may lose pressure. Although the airplane is inactive during parking, it is important to maintain the engine, auxiliary power unit, and cargo fire extinguishing systems, and all portable fire extinguishers in fully serviceable condition in case of a fire. The airplane must be electrostatically grounded while it is parked.

Once the aircraft is ready to go, pilots from the airline will fly to pick it up (via regional commercial travel) and then fly it back for commercial service.

Long journey until a full return to service

While it is optimistic to discuss how aircraft are returning service, the truth is that the aviation industry has a long way to go until it fully recovers. Many airports across the globe are still flooded with grounded aircraft, and some countries still haven’t opened their borders (Australia for example has extended its border closure to 2022). As such, many of these planes will remain on the ground for longer than expected, and if they are not stored correctly, it can have tragic results. Recently a Sriwijaya Air 737-500 crashed in Indonesia after nine months in storage.

The aircraft had been approved to fly according to the Indonesian transport ministry and Directorate General of Civil Aviation (DGCA), both of which said that they “met the stipulated conditions for the extension of its aircraft operation certificate (AOC)”. The plane underwent further checks before returning to operation service on December 22nd, 2020, following a special request by Boeing to check for corrosion of the engine valves. The report is not clear at this stage what the outcome of these additional checks was but we can only assume the plane passed with flying colors.

While the investigation is ongoing, it is suspicious that a plane would fail so soon after a return to service. If a connection is proven, it will make many other airlines yet more careful, and reinforce the procedures and checks leading to bringing aircraft back into the fold.

Tunisian Airports and The EU Open Skies Agreement question

Tunisian Airports and The EU Open Skies Agreement question

The Tunis–Carthage International Airport is the main international airport of the country

Tunisia is not currently part of the European sphere of aviation, with carriers hailing from the north having to apply for international permission to cross its border. But that could all change in the future with the country making great haste to sign and agree to the European open skies agreement and thus allow the great European powers to conquer the northern coast of Africa yet again.

“This far-reaching aviation agreement will improve market access and contribute to the highest safety, security, and environmental standards,said EU Transport Commissioner Violeta Bulc in December, when the agreement was signed. “This is great news for tourism, passengers, and businesses.”

While it would be a boon for tourism in the country and airports would certainly find themselves flush with business, local airlines are looking on worried, fearing that their reign of unchecked access to the domestic market is coming to an end. Should Tunisia open its borders to the world? This question is wrapped up in the airport landscape, to answer one, we must also examine the other.

What is the main airport in Tunisia?

Tunis–Carthage International Airport is the main international airport of the country, serving the capital city of Tunis and has the namesake of the ancient city of Carthage (which once rivaled the Roman empire). It is the home hub airport to several of the airlines in our previous article and has two runways (although only one of them is longer than 3,000 meters for larger widebody aircraft). The airport was originally built by France after the second world war, an improvement over the US military airfield that was located on the same site previously. The airport has since expanded with three terminals, with the third opening for charter flights in 2005 (including tourism charter flights), and has grown to accommodate over five million passengers a year before this year.

During the Coronavirus crisis in 2020, the airport became the main focal point for the government’s battle against the virus, shutting down from March until June, with only a few citizen repatriation flights arriving. However, such a tourism-driven country can’t ignore the world even in a crisis and has since opened up the airport to 60 flights a day, from areas of the world with less Covid-19 cases. Tunisia has implemented a traffic light system, with arrivals segregated to three levels of color depending on how many Covid-19 cases there are from their home country. “Green” applies to areas with few cases, and these arrivals are allowed free access to the country. Anyone wishing to enter Tunisia from countries classified as “Yellow” must present on board a negative PCR test for COVID-19 before the trip. And those in “Red” countries can’t enter the country unless they are citizens. And even then, they need to isolate for 14 days.

“These measures include the obligation to place all members of the same family coming from countries not classified on the ‘green’ or ‘orange’ list, including children under 12, in mandatory isolation,” said a statement released by the government. 

What other major airports are there?

Tunis–Carthage isn’t the only major airport in the country, several other airstrips can give the capital a run for its money.

Djerba–Zarzis International Airport, located on the island of Djerba, is a major tourism airport and one of the must-visit destinations in the Mediterranean. However, because the tourism market is seasonal, this airport sees very little traffic outside of the busy European summer. Nouvelair and Tunisair both operate hubs at this airport throughout Tunisia and to Europe year-round, giving them almost exclusive access to the airports’ single runway outside of the summer months.

Enfidha–Hammamet International Airport is one of the newest airports in the country, located to the north of Djerba and for the resorts located on the coastline. It doesn’t have much activity at all outside of the summer season (and is effectively shut down during the covid crisis) and operates many charter flights (even from local carriers).

Monastir Habib Bourguiba International Airport is another airport much like Enfidha, plying the coastal tourism trade, but it also has a double purpose of serving the Monastir and Sousse areas in Tunisia. Unlike other airports in the country, this airport is not operated by the Office of Civil Aviation and Airports (OACA) but is run by the Turkish consortium TAV Airports Holding for a period of 40 years. In 2007 it was the busiest airport in the country, even more so than Tunis, and carried well over four million passengers thanks to its busy summer months.

Three other notable airports include:

  • Sfax–Thyna International Airport – Severing the coastal town of Sfax, this airport got a multi-million dollar facelift ten years ago and offered regional flights along the coast (and to France) to neighboring countries. Although it hasn’t seen the same success as other airports in the country.
  • Tabarka–Aïn Draham International Airport – Serving the very top west point of the country, this airport was once a major tourism destination by following the public uprising in 2011 lost traffic, and was threatened to be shut down in 2013. Today it is only infrequently served by local regional carrier Tunisia Express
  • Tozeur–Nefta International  Airport – A minor airport that offered domestic connections and flights to France from the deep south of the country. It doesn’t have any other international flights apart from France, although the opportunity is there for the future. Interestingly, this airport also has two defunct Boeing 747s in Iraqi Airways since the first Gulf War, stashed away until after the end of the way these planes never made it home and are in legal limbo.

Is the open skies agreement a good solution for Tunisia?

Is the Open Sky agreement a good thing for Tunisia?

With so many airports that are reliant on the tourism business, it is an obvious solution that opening up the countries’ airports will ease the arrival of foreign aircraft. But not all parties are happy with that decision.

“The agreement is a catastrophe. Tunisair is not ready yet for competition,” Elyes Ben Miled, general secretary of the Tunisair union, told Reuters in March. “We are ready for everything and we may go on a national strike at all Tunisian airports.”

Airlines in Tunisia need to fight for every bit of business from the northern continent, but at the same time are protected from the likes of Ryanair and EasyJet from poaching their lucrative tourism markets – although what is good for the airlines isn’t good for the country as a whole.

“My belief is that Tunisair cannot accept to integrate into a competitive world with tools far inferior to those of powerful competing companies that have huge opportunities,” said Tunisair CEO Ilyes Mnakbi to Arab Weekly.

If foreign carriers are allowed into the country by signing the EU open skies agreement, it will mean that smaller airports will suddenly see an influx of charter carriers and low-cost operations. These low-cost operators will dramatically cut into the flag carrier airlines, but it will also mean more tourists that discover the wonderful desert oasis – especially to many of the airports featured above that have lost favor in recent years.

Domestic airlines need to decide if they can put up with pain in the short term (an especially hard thing to ask in recent times) for a longer, more successful future. And who’s to say that these airlines can’t simply cross the pond and take some market share from the rivals they fear so much. Especially if local carriers can upgrade through the agreement.

“We do not fear the ‘open skies’ too much if the European Union agrees to upgrade us, as it did in 1995, for the Tunisian manufacturing industries at the conclusion of the Free Trade Agreement for manufactured products,” Mnakbi concluded.

So far the agreement is still being ratified in both the EU and Tunisia, but sources close to the matter have said that once Tunisia signs the dotted line, the agreement will go into effect and change the future of Tusinia aviation forever.

Balancing Aviation: Airlines In Tunisia

Balancing Aviation: Airlines In Tunisia

Nouvelair and Tunisair are the main passenger airlines in Tunisia

Nestled in the middle of the North African coast is the humble nation of Tunisia, which (thanks to its proximity to Europe and attractive locality for tourism) has quite the aviation industry. Today in this article, Eways Aviation will go over the airline landscape of Tunisia and discover the hidden aviation gem of the Mediterranean. According to Ch-Aviation, Tunisia is home to a list of five airlines. Let’s start with the flag carrier of the country.

Tunisair

Founded back in 1948 with the help of Air France, this airline has focused on connecting Tusisa with Paris and bringing a taste of the French riviera to the desert of Africa. Routes typically include flights from its hub in Tunis–Carthage International Airport, to Paris, Nice, Germany, and some international routes to the Middle-East and as far as Montreal.

What is remarkable is the airlines’ fleet makeup is comprised of a range of planes that are on the smaller side than you would commonly expect. The airline operates a fleet of 20 older aircraft, with four Boeing 737-600s, two Airbus A330-200s, 12 Airbus A320s, and two A319s according to the Airfleets database. These planes are rated for fewer passengers than others on the market (like the bigger Boeing 737-800) but are easy to fill up with affordable fares and simpler to make profitable. Make no mistake, however, these planes are old and are a considerable MRO drain on the airlines’ finances – with some of the Airbus A320s passing over 30 years of service.

Recently the airline has had some trouble thanks to the Coronavirus crisis cutting off the tourism market (a loss of USD334 million), and its operation has flatlined to the point that it requires government aid. This aid won’t be without strings, the government is planning an assortment of cost-cutting measures, such as a fleet renewal to more modern aircraft, downsizing, and reevaluating its routes.

  • The new fleet will include the acquisition of five new Airbus A320s and retiring any aircraft over 20 years old. These 11 airframes include several A320s, all the Boeing 737s, and the A319s.
  • The airline will also only fly profitable routes over the next four years – scrapping any routes that were run at a loss for connectivity or international prestige.
  • The government will also be seeking an equity partner as part of any restructuring. The strong rumor is that Qatar is the ideal airline to take over the struggling enterprise, although some insiders have said this would not be good for the country as a whole.

“Public opinion should know that the decision to fire me came to sell Tunisair to the Qataris. Tunisians will pay the price,”  former Tunisair CEO Elyes Mnakbi told the Tunisian newspaper Al Shorouk. “I had warned against the dangers of the cession of a public company like Tunisiair, which represents the sovereignty of the Tunisian state.”

Minister of Transport and Logistics, Moez Chakchouk, optimistically stated that Tunisair had the ability to overcome its financial woes but only through addressing each of the airline’s subsidiaries that had become a financial drain, specifically Tunisair Technics, the carrier’s MRO services provider. This article would be amiss not to mention the controversy surrounding the airline last year, namely the arrest of several company executives back in August after two aircraft were repaired in Canada at triple the cost. These former employees have been accused of misappropriation of public funds and money laundering and their trial is underway.

Tunisair Express

The subsidiary local airline of Tunisair, Tunisair Express, was originally created just to fly domestic flights between the various airports in the country but has since gone international. The airline uses a fleet of four (plus one more on the way) ATR 72s for operations including flights to Malta and Italy. The airlines’ operations were merged into the main carrier to streamline costs however the branding has remained for the smaller operation.

Tunisia Express shut down during the global lockdown, but has since resumed domestic flights from June 12th, 2020, with flights between Tunis and Djerba twice a day, and once a week to the city of Tozeur. No international flights have yet resumed.

Tunisavia

The next airline on this list is Tunisavia – a small charter operation that operates flights for oil and gas companies, as well as remote medical evacuations and business flights. It operates only a small fleet of aircraft, two Twin Otter DHC-6s, and two Bombardier Challenger 5600s.

Nouvelair

Tunisair has a fleet of nine Airbus A320s

Noticing that Tunisair was not filling in the tourism demand gap, a charter affiliate of French operator Air Liberté founded Nouvelair (then called Air Liberté Tunisie) in 1989 to operate charter operations for package holidays between tourism resorts on the coast and their destination cities. The airline has since expanded to be owned by several travel firms and hotel chains. According to the Airfleets database, the airline has a fleet of nine Airbus A320s, which makes it almost a rival to Tunisair itself – likely a thorn in the side of the national carrier who wants to capture as much of the tourism market.

But the airline hasn’t been satisfied with just the charter market and has since expanded to become a scheduled carrier operating across Europe. It even has expanded under the Coronavirus crisis, with the launch of two new routes – operations between Tunis and Brussels, twice a week in July last year, and a second route between Brussels and a new hub in Djerba on the coast once a week. Part of the reason for this expansion is that the airline is filling in the empty shoes of Thomas Cook, who went under last year – the defunct carrier had previously controlled 60% of the air tourism market to Tunisia.

Karim Dahmani, Nouvelair’s sales, and marketing central director said to Travel Weekly,We believe that Nouvelair must play its part in helping travelers return to Tunisia for holidays. It is important for us to support the leisure economy of Tunisia, especially now the largest UK provider of seats to Tunisia is no longer in the market.”

Express Air Cargo

The last airline active in Tunis is Express Air Cargo, which operates a smaller fleet of two cargo Boeing 737s across the Mediterranian Sea, to the Middle East and into Africa.

The air cargo market has been so lucrative of late during the crisis, that Tunisair has considered moving into this space, and it is very possible that they could acquire this firm rather than branch out independently. Minister of Transport and Logistics, Moez Chakchouk, proposed “establishing a Tunisair cargo company to take advantage of current opportunities in air freight in light of depressed passenger travel caused by the pandemic and advocated airport investments for the development of air cargo business”

A country in balance

To sum up the aviation industry in this country, we believe that even though it is a smaller industry, is one that is in balance. The two major transport carriers manage to fill in the market gap for demand and keep either from growing too rapidly too fast. However, this balance of airlines in the country may be upset by coming changes to the industry thanks to the pending open-skies agreement with the EU. That question, however, will be answered in our next article on Tunisia’s airports.