Air Algerie Set For Expansion
Algeria’s flag carrier, Air Algerie, is set to expand its fleet over the coming years with major deals signed with Airbus and Boeing. Despite these deals, the company still faces trouble over industrial action and a decline in passenger numbers. Six years after its transition from a nationalized company to a privatized enterprise,
Air Algerie is set for further expansion with new routes and aircraft, but problems with trade unions and falling passenger numbers may yet cause problems. Over the past six months the airline has launched new routes to Canada and China. Routes are also slated to Austria, Portugal and Spain in the coming months.
Future services are slated for New York and Moscow, but Africa remains its immediate priority. The company’s priorities also remain set for expansion on southern African routes. Bamako and Dakar will be added later this year. In all, the company will see an increase from 40 to 53 destinations. The return to relative stability in Libya has also opened up the North African aviation market again, as Libyan Airlines reopens on some routes. Air Algerie is well placed to take advantage of this growing market. Tensions with trade unions have been a long-standing issue for the company with strike action threatened last year.
It remains to be seen if all parties can come to a final resolution over working hours, but a staff increase may ease pressure. To meet the fleet expansion plans, the airline will recruit 200 new pilots this year, a move that will bring the company workforce up to almost 10000. The company will finance the purchase with a 49-billion Algerian Dinar (about US$ 600-million) loan supported by the BNA (National Bank of Algeria), CNEP (Savings and Pensions) and BEA (Algerian External Bank), according to the TSA press Agency.
The move comes as the Government finally deregulates the Algerian air market, which has remained an exclusive preserve for Air Algerie since independence. Previous moves toward deregulation stalled during the 1990s when the country was involved in a protracted civil war. A report from the Oxford Business Group, a business intelligence company, indicates the Algerian airline recovered slightly from a passenger fall with 1,29-million passengers to figures to 1,38-million between 2011-2012.
However, these figures still lag behind the company’s high point in with two-million in 2009 and 2,67-million in 2010.Air Algerie has managed around 6% annual growth in turnover, despite a fall in passenger numbers. Boeing’s contribution will be a $724-million price for eight 737-800 aircraft. Delivery is set for 2015.
These will augment an existing fleet, which includes 17 737-800s and five 737-600s .Three 737-800s were purchased in 2010. “The 737-800 continues to be the backbone of Air Algeries fleet. So far, we are pleased with these aircraft, and anticipate receiving all eight of these new units before the end of 2016,” said Mohamed Salah Boultif, chief executive officer in a statement welcoming the deal.
“There is the flexibility for Air Algerie to change the model if required from 800s to 900s, said Van Rex Gallard, VP Sales for Africa at Boeing. If Air Algerie completes a traffic and marketing analysis and conclude they need extra capacity, we will provide that to them,” he added. Gallard also expects growth in the cargo sector, with the potential for Algiers to become a cargo hub as trade between China and Algeria continues to grow. According to the Massachusetts Institute of Technology, over 24% of imports to Algeria originate in China.
The developments come as Algeria expands Houari Boumediene Airport, which serves Algiers. The Government hopes to see the airport expand to take 10-million passengers a year by 2016, a 40% increase in numbers from 2012.Algerias thriving oil industry and tourism sector are expected to drive growth.
Transport Development Airbus is set to sell three A330-200 aircraft to Air Algerie, a deal signed at last year’s Dubai Airshow.The aircraft will serve the airlines medium and long-range routes, such as the new destinations in China and Canada. “We are expanding our commercial strategy to strengthen our position in the market by extending Air Algeries network to long haul routes.
This is now made possible with the A330 family of aircraft”, said Mohamed Salah Boultif in a recent statement.”This new order for A330s reinforces our commitment to a family of aircraft which already helps us to achieve our ambitious expansion plans, in a profitable and sustainable manner.”
Provided it can continue to deal with the unions, and answer domestic criticism over expansion loans, Air Algerie is set for significant expansion over the next few years, but whether this will be reflected in passenger numbers remains to be seen. Another unknown is how the well protected company will deal with competition as other airlines increase operations in Algeria.
With a mixture of Boeing and Airbus jetliners Air Algerie is ambitiously expanding its fleet and network but modernizing its fleet to include long-range jetliners. Though it is facing challenges with the number of passenger’s reduction it is determined to diversify in regional and international scheduled flights globally. With the expansion employment opportunity will be created and the economy of Algeria will grow drastically.
Air Algerie has segmented into services into passenger and cargo flights both regionally and internationally to be able to serve a wide range of clients worldwide. Anthony A Juma is the Editor and Director Commercial and Flights Operations at Wings Over Africa Aviation Limited.
