Competing against Tunisair, other airlines and improved rail connections is Syphax Airlines’ main challenge. The national carrier has a larger fleet, more integrated services and a long track record. However, the national airline attracts criticism for its lack of timeliness, which opens up opportunities for other airlines to win market share.
Syphax Airlines’ advantages over Tunisair include a young fleet of aircraft. It also offers both regular and charter flights and its hybrid model of combining low-cost tickets with some of the services offered by regular carriers will appeal to customers. The backing of the well-capitalised Telnet group also gives it a financial advantage, but the carrier faces significant challenges.
The airline will have to work hard to tackle the historic monopoly Tunisair has over the domestic aviation market. There are also other airlines operating in Tunisia, including Tunisair Express, which is affiliated with Tunisair and was set up in 1991. In 2011, it transported around 364,000 passengers. Nouvel Air is a charter airline that carried around 990,000 passengers in 2011.
Syphax Airlines’ revenue streams are also dependent on the tourism sector, which is highly seasonal and also has suffered in the wake of the 2011 uprising and continued political instability.
As with all airlines, Syphax Airlines faces the continued volatility of fuel prices, but its decision to invest in fuel-efficient aircraft will help mitigate this to some extent.
The pending approval of an EU-Tunisia open skies agreement also brings its own challenges. Syphax must ensure it has built up a substantial market share to compete with other low-cost airlines that could enter the Tunisian market following the conclusion of such an agreement.
The construction of the Trans-Maghreb rail link and high-speed train lines will provide alternative forms of transport. Syphax Airlines will need to work hard to maintain its appeal and competitive edge as Tunisia’s transport sector evolves.