Société Tunisienne de l'Air-Tunisair History

Company Perspectives:

Tunisia's affinity for flying took hold at the beginning of avionics at the turn of the 20th century. Since the creation of TUNISAIR in 1948, Tunisia has kept pace with developments and standards in national and international air transport. TUNISAIR's ISO 9002 certification bears witness to this firm commitment. Moreover, by offering attractive rates and providing quality service to its clientele, TUNISAIR has experienced nonstop growth since the 1960s. To meet the demands of increasing passenger business, while maintaining the quality services provided, TUNISAIR since 1961 has opted for the continuous renewal of its fleet of aircraft. Today, known throughout Europe, North Africa and the Middle East, TUNISAIR serves more than 49 destinations with regularly scheduled flights and 80 destinations with charter flight service.

Key Dates:

1948:

Tunisia's state airline is formed with aid of Air France.

1954:

First profit is posted; company begins flying to Club Med site on Djerba.

1958:

"Tunisification" of the airline begins.

1961:

Tunisair begins flying Caravelle jets.

1971:

New Boeing 727s allow direct London flights.

1987:

Tunisair is restructured following November 7 coup.

1991:

New headquarters and new corporate logo are introduced.

1995:

Initial public offering takes place on the Tunis Stock Exchange.

1998:

First codeshare arrangement is launched with Air France.

Company History:

Société Tunisienne de l'Air-Tunisair (Tunisair) is Tunisia's state-sponsored international airline. In the Maghreb region of northern Africa, sandwiched between Algeria and Libya, Tunisia has avoided the political extremes of its neighbors while developing an economy based on tourism. (Textiles are the country's second largest industry.) Tunisair, a modern airline that has attained ISO 9002 certification, has been a key player in bringing travelers (particularly from France, Italy, and Germany) to enjoy the country's surf, sunshine, and culture. The Tunisian government owns 70 percent of Tunisair. Tunisair hauled more than 15,000 metric tons of freight in 2000, when its passenger count approached 3.5 million.

Origins

Independence came to many African nations after World War II. Part of this process in Tunisia, a French protectorate between 1881 and 1956, involved setting up a state airline. Société Tunisienne de l'Air (short form: Tunis-Air or Tunis Air; later, Tunisair) was formed in 1948 by the Tunisian government and Air France (then Compagnie Air-France), whose involvement in the new airline was crucial due to the lack of qualified technical personnel in the area.

The articles of incorporation were approved on October 21, 1948. The government and Air France each took 35 percent holdings, while private French and Tunisian interests divided the remainder. Initial capital was FFr 60 million. The company was headquartered a 1 rue d'Athènes, Tunis. At a company meeting on December 7, 1948, a Mr. Pomey was appointed director general. A board of directors, which included two Tunisians, was named in February 1949.

Flying operations began on April 1, 1949. The new airline took over some of Air France's short-haul routes along the African coast and across the sea to Marseille (cargo only at first), Nice, and Rome. The first North African points in the network were El Aouina, Bône (later called Annaba), Algiers, and Ajaccio and Bastia, Corsica. The network of scheduled routes was steadily expanded, and charters took the airline to still other destinations. Every year, Tunis Air carried thousands of Muslims on the hajj pilgrimage to Jeddah, Saudi Arabia.

First Profit in 1954

In 1954, Tunis Air began a longstanding relationship with the new Club Méditerrannée, or Club Med, which had set up a site on the Tunisian Isle de Djerba. By the mid-1970s, this had become Tunis Air's chief domestic route, illustrating its dependence on international travel. Tunis Air posted its first profit, FFr 3.2 million, in 1954.

Also in 1954, the company bought its first Douglas DC-4 airliner; a second and third were acquired in 1956. Tunis Air had begun operations with four war surplus Douglas DC-3 (C-47 Dakota) transports bought from the U.S. Army, standard equipment for postwar start-up airlines. The purchase price of FFr 56.5 million consumed nearly all of Tunis Air's start-up capital. Two of the planes were dedicated to passengers, the other two to freight.

The company opened its first direct route to Paris in March 1956. Passenger count exceeded 100,000 for the year and Tunis Air showed a profit of FFr 114 million.

Tunisification Beginning in 1958

A program to staff Tunis Air with Tunisians, "Tunisification," commenced in 1958. Flight crew were trained in France and Morocco; Tunisians were also hired as stewardesses and in other aviation-related occupations.

The company progressed to French-made Caravelle III jets in 1961; the first arrived on September 2. These 76-seat planes, used on routes to Nice and Paris, were phased out in favor of the larger Boeing 727s in the mid-1970s. The company continued to fly DC-3s to Djerba after the third Caravelle was bought in April 1964.

A new airport, El Aouina, opened in Tunis in 1962. In 1965, Tunis Air opened its first foreign offices, in Paris, Geneva, Frankfurt, and Rome.

Tunis Air played an active role in courting tourist business in the 1970s. During this time, a quarter of Tunis Air's passenger traffic was carried on charter flights.

Going the Distance in the 1970s

In August 1972, headquarters were moved to 113 Avenue de la Liberté. Tunis Air then had 1,100 employees. The company acquired a Boeing 727 in 1971. Two more were acquired in 1973. This model allowed Tunis Air to begin flying to London, a ten-hour trip, in April 1973. The number of visitors to Tunisia from England grew by a factor of 30 as a result.

A 1975 article in Aviation Week & Space Technology chronicled some of the issues facing Tunis Air in the 1970s. It resisted calls from Libyan Arab Airlines for a single consortium to carry traffic beyond the region. Tunis Air was also increasing its international route network. As armed conflict steered tourists away from Lebanon, traditionally one of the region's top travel destinations, more were coming to Tunis, Algeria, and Morocco. The airline worked closely with the National Office of Tourism on promotions.

By this time, Air Tunis was handling all of its own maintenance work and most of its employees were Tunisian. Its pilots were still being trained by Air France, which still owned 30 percent of the company.

Tunis Air's fleet included ten Boeings by the end of 1977; the last of the Caravelles was retired. Passenger count exceeded one million for the first time.

A new international airport in Towzar-Naftah, in the west central part of Tunisia, was inaugurated in December 1978. Boeing 727 service connected this new tourist destination to Paris, via Monastir (Al Munastir) on Tunisia's eastern shore.

In January 1979, a Boeing 727 flying from Tunis to Djerba was hijacked and taken to Tripoli. The hijackers, demanding release of jailed Tunisian political figures, ultimately surrendered. The company's first two Boeing 737s, mid-sized passenger jets, entered service in the fall of 1979.

A route connecting Tunis with Dakar was opened in March 1982, and a Damas-Athens route was launched three months later. At this time, Tunis Air took delivery of its first Airbus A300, a European-made widebody jet.

Two important new routes debuted in 1985: Monastir-Geneva and Tunis-Athens-Istanbul. Tunis Air posted a loss in 1985 but would remain profitable for the next dozen years. Tunis Air suffered a 13 percent drop in passenger traffic in 1986 due to difficult economic conditions.

1987 Coup

The president of Tunisia, Habib Bourguiba, was deposed in a bloodless coup on November 7, 1987, and was replaced by Zine al-Abidine Ben Ali. Tunis Air Chief Hedi Attia was arrested at the same time and replaced with Mohamed Souissi, and the government set out to reexamine projects, particularly those involving transportation, planned during the Bourguiba administration. Boeing and Airbus were both competing to win a refleeting order of about eight mid-size airliners.

In 1987, Tunisair began to be operated under strictly commercial guidelines, without government subsidies. The company seemed much improved in 1988, with a net operating profit of TND 69 million, up 50 percent from the previous year.

Two Airbus A320s were placed into service in 1990. Another Boeing 737 was added to the fleet in April 1992. Other changes accompanied Tunisair's new commercial focus. The logo was modernized, retaining the trademark gazelle in 1990. The company inaugurated a new headquarters in November 1991.

The route network expanded into Budapest, Lisbon, and Prague in the summer of 1992. The most profitable routes were to Italy and Saudi Arabia, according to Air Transport World. The network stretched to Warsaw, Bratislava, Linz, Salzburg, Moscow, and Stockholm in the mid-1990s.

In the early 1990s, the Tunisian government was planning to sell off between 10 and 20 percent of the airline. Air France had decreased its shareholding to 5.5 percent. The government owned the remainder, except for 9.5 percent owned by government agencies.

Turnover was TND 396 million ($390 million) in 1992, when the airline carried 2.35 million passengers. The company had 3,750 employees. During the year, Tunisair formed a commuter airline subsidiary, Tuninter, that provided feeder traffic with a fleet of three ATR turboprop aircraft. (Tunisair owned 40 percent of it.) Another subsidiary, Aldiana, operated a chain of hotels.

The carrier, noted Air Transport World, was regarded as one of the continent's most progressive airlines. However, tourism--the source of 70 percent of Tunisair revenues--had been in decline. Another important source of business was that of carrying laborers to work in oil rich countries, and transporting 7,000 pilgrims a year to Mecca. Cargo (15,000 tons) accounted for $14 million of annual revenue, but was not highly profitable due to government-mandated low rates.

In November 1992, Abdelhamid Fehri, former head of the Tunisia Air Force, became Tunisair's 15th CEO. Around this time, the company completed a new headquarters building at the Tunis Carthage Airport.

Public in 1995

A public offering of 20 percent of the airline's stock was made in June 1995. In the same year, Tunisair introduced its Privilège class of seating as well as the Fidelys frequent flyer program.

Pretax profits rose to TND 26.57 million ($24.2 million) in 1996. The next year, Tunis Air was discussing a possible alliance with several European airlines--Air France, British Airways, Lufthansa, and Swissair.

Ahmed Smaoui succeeded Tahar B. Ali as chairman in late summer 1997. At the time, Tunisair had a market share of 35 percent of tourist charters and 58 percent of scheduled traffic, in spite of competition from 22 scheduled and 80 charter airlines.

Passenger count exceeded three million in 1997. Business class ("L'Espace Privilège") passengers accounted for 13 percent of passengers and 25 percent of total revenues. Revenues were $674.4 million, while net operating profits amounted to $17.6 million, a bit lower yield than usual. A catering division provided $40 million of revenues, and duty-free sales added another $11 million.

Company executives were encouraging early retirement as a way to reduce staff size and increase productivity. The carrier had 7,200 employees at the time, and operated a fleet of two dozen planes (two-thirds Boeing, one-third Airbus). Tunisair was continuing to renew its fleet with the aim of reducing the number of aircraft types (then being Boeing 737s and 727s and Airbus A320s and A319s) to just two.

Tunisair entered its first ever codeshare arrangement (a marketing agreement whereby two airlines shared flight designator codes in computer reservation systems) in 1998 with, not surprisingly, Air France.

In the late 1990s, the government was still talking of selling its stakes in Tunisair, as well as 18 other state-controlled firms. (There were plans to sell off another 49 companies in their entirety, reported Air Transport World.) Tunisair lost $20 million in 2000 on revenues of $424 million (TND 613 million), up 4 percent from the previous year. High fuel prices and the cost of financing new planes were cited as reasons for the loss.

Principal Subsidiaries: Aldiana; Tuninter.

Principal Competitors: Air Algerie; Nouvelair Tunisie; Royal Air Maroc.

Further Reading:

• Ba-Isa, Molouk Y., and Saud Al-Towaim, "Another Saudi 'Hijacker' Turns Up in Tunis," Middle East Newsfile, September 18, 2001.
• Bowman, Louise, "Digging Deep," Airfinance Journal, October 1994, p. 22.
• Davies, R.E.G., A History of the World's Airlines, London: Oxford University Press, 1964.
• Doty, Laurence, "Arabs Seek to Balance Unity, Competition," Aviation Week & Space Technology, December 1, 1975, p. 28.
• Forward, David C., "Good Things Come in Small Packages," Airways, March 2002, pp. 33-37.
• "Hijackers Jailed," Aviation Week & Space Technology, January 22, 1979, p. 21.
• Hill, Leonard, "Nifty Niche Navigator," Air Transport World, September 1998, pp. 122-23.
• "North African Credit Competition Takes to the Air," International Trade Finance, December 17, 1987.
• "Tunis Air Plans Growth As Profits Rise," Flight International, July 9, 1997.
• Vandyk, Anthony, "Tuning Up in Tunis," Air Transport World, June 1993, p. 200.
• "World Airline Financial Statistics--2000," Air Transport World, World Airline Report, July 2001, http://www.atwonline.com.

Source: International Directory of Company Histories, Vol. 49. St. James Press, 2003.