Air Transport World

Nifty niche navigator

Spurning costly entanglement in distant 'prestige markets,' Tunisair banks on what it does best, short-to-medium-range services, to stay profitable

TUNIS--Quality-committed, state-controlled Tunisair knows its limits but parlays them with panache into consistent, if modest, profits. It has been in the black since 1986 and speaks proudly of "close to zero" net debt.

Net profit margins have fluctuated generally in the 6-15% range for the past 10 years. Managers forecast 6% annual growth over the next 10 years.

"We are a typical niche carrier, with a clear focus on continuing to develop Tunisia's economically vital leisure industry," declares Ahmed Smaoui, chairman and general manager. "Two out of three passengers are tourists."

As a former Minister of Tourism who has spent years in government service, Smaoui obviously knows whereof he speaks. Just over a year ago, he succeeded Tahar B. Ali as head of the airline, which controls about 35% of the country's bustling touristic charter business and 58.2% of scheduled traffic.

Tunisia liberalized its aviation environment years ago. So, while Tunisair still commands a healthy 45% average share of the country's international air-travel market, it faces stiff competition from 22 scheduled carriers and 80 charter airlines - a cause for increasing concern in TU's executive suites.

A small but striving Tunisian competitor in the leisure market is Monastir-based charter carrier Nouvelair, which operates four MD-83s but signed a firm order for an Airbus A320 with an option on two additional aircraft in April. …

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