"We will go to China in 2024 or 2025 and to the USA in 2026"
Tunisair is thinking big. While the company with the red gazelle is gradually returning to its pre-crisis network, its CEO Khaled Chelly believes that it has the assets to develop an audacious service plan in the years to come, by focusing its strategy on operationally profitable routes.
On the long-haul route, "we will go to China in 2024 or 2025 and to the United States in 2026", he said during a press briefing on Tuesday 29 March at Paris-Orly during the inauguration of the new Tunisair commercial agency, reports Jeune Afrique. Khaled Chelly, appointed to head the company in March 2021, supports his choice by the satisfactory results of the transatlantic offer to Montreal, which should increase for the summer from two to three frequencies per week. The boss of Tunisair is well aware that one of the weak points of the company, which is currently over-indebted, is the lack of optimisation of its network. He therefore promises to eliminate loss-making and less profitable routes, such as Ouagadougou, Prague and Beirut. "We have reviewed the profitability of each route since 2011, and we will only keep those that cover their operating costs," explained the CEO. Conversely, there are plans to increase frequencies on high-potential routes.
Rationalisation of the fleet
In the wake of cost reduction, Khaled Chelly also plans to optimise the fleet by refocusing activities on the A330 aircraft (for long-haul) and especially the A320neo, of which two units out of five have recently been received.
Tunisair ended the year 2021 with more than half of its fleet out of service due to lack of maintenance. Eventually, the age of its aircraft should be reduced to below 10 years. Following this logic, a certain number of aircraft will no longer return to the fleet because they are over 25 years old. These include four Airbus A320-200s that entered service between 1991 and 1995. At the same time, the company should also dispose of the older aircraft - Boeing 737-600 and Airbus A319-100 - which require heavy maintenance and huge investments. Khaled Chelly sees himself finishing 2022 with an active fleet of 15 aircraft, then 17 aircraft in 2023 and 19 by 2027.
Downsizing
The reduction of the wage bill is the other aspect that the boss of Tunisair would like to tackle. Studies carried out by post aim to "bring the workforce back to international standards of 120 staff per plane", he explains. An objective that requires the elimination of about 1,000 positions, several of which "will disappear by themselves with the digitalisation of processes". Tunisair currently has 6,950 employees, 3,200 of whom work for the company of the same name, with the rest of the staff spread among the four other subsidiaries (Tunisair Express, Tunisie Catering, Tunisair Handling and Tunisair Technics).
Debt repayment and recapitalisation
At the peak of the health crisis, Tunisair went to the negotiation table with its main creditors, including three Tunisian banks. The good faith of the Tunisian flag led to the rescheduling of its debt over ten years. "This is what allowed us to avoid the worst during these two years of crisis," comments Khaled Chelly.
In the medium term, it is not excluded that the company proposes to the various creditors to transform their debts into capital within the framework of a partial privatisation. To date, Tunisair has accumulated a deficit of more than 1200 billion dinars (366 million euros) while the company's debt is close to 2.2 billion dinars (665 million euros) including 1 billion dinars owed to the Office of Civil Aviation and Airports (OACA), and TAV Tunisia, the manager of the international airports of Enfidha-Hammamet and Monastir Habib Bourguiba.
This whole string of austerity measures, seen as a "tactical retreat" is contained in the restructuring plan that Khaled Chelly should present, at the end of April, to the restricted Council of Ministers for approval. It is once its restructuring is complete that the company could consider seeking a strategic partner, he explains. This plan, which is accompanied by a recapitalisation, should however face the powerful UGTT union, considered as the main responsible for the dismissal of Olfa Hamdi, Khaled Chelly's predecessor, who occupied the position for only seven weeks.
