The Algerian government has granted their national carrier, Air Algérie approval to order 15 new aircraft to aid its route expansion in Africa and Asia. According to the Algerian Council of Ministers, they have also authorised the purchase of ships for transporting passengers, goods and cereals.
The national carrier has not renewed their fleet since 2016 when they purchased Airbus 330 and Boeing 737 aircraft. The fleet renewal program was later suspended in 2020 in the wake of the harsh economic realities of the COVID-19 pandemic.
Their new fleet renewal strategy is estimated to cost at least 250 billion Dinars ($1.7 billion), and is reportedly part of their restructuring plan which will see to the separation of the group into different entities. According to Mahgreb Times, the airline will have several subsidiaries for passenger transport, and a single entity dedicated to aircraft maintenance in partnership with foreign companies. Aside from the passenger airline itself, the group currently comprises Technics Air Algérie, Air Algérie Catering, Air Algérie Cargo and Air Algérie Handling.
The airline currently has a fleet of 56 aircraft which include 8 A330-200s, 25 B737-800s, 2 B737-700s, 5 B737-600s, and 15 ATR 72s. The bulk of the fleet are above 14 years and fast approaching the end of their shelf life.
The routes the airline wishes to take on require long-haul aircraft, but it is not yet clear which exact aircraft the airline plans on ordering. The airline has said it plans on studying its network possibilities before deciding which aircraft to order. Air Algérie currently flies to 28 countries across Africa, North America, Europe, and Asia, with 44 international destinations. The airline also serves domestic routes in 35 local Algerian airports.
Air Algérie was established in 1947 as a private airline part-owned by Air France, however, by 1963, the government would assume a 51% possession of the airline’s assets. That same year, the airline was also made Algeria’s national carrier. The Algerian government’s stake in the airline would continually grow till it reached a full 100% in 1972 after Air France relinquished its remaining 17.74% stake.
The airline now has over 10,000 employees and boasts of carrying more than 5 million passengers annually with its wide fleet variety. However, the company has been consistently loss-making over the years, often requiring financial bailouts from the government in order to avoid going bankrupt. Nonetheless, this is not an uncommon occurrence with airlines which yield very large revenues often swallowed up by extremely high operating costs of maintenance (and fuel). The Covid-19 pandemic was particularly harrowing to the finances of airlines worldwide, and in fact, many smaller airlines could not survive it.
For the Algerian government, the funds invested in the airline often bring returns in other sectors such as tourism and international business/trade relations. The route expansion of Air Algérie promises to bring in more possibilities in that regard.