Tunisia’s troubled Syphax Airlines grounds flights

Friday 04/09/2015
Syphax Airlines aeroplane.

Tunis - Tunisian privately owned Syphax Airlines an­nounced the “temporary suspension” of all of its flights to and from Tuni­sia.
The International Air Transport Authority (IATA), the global trade association for the airline indus­try, instructed partner airlines and agencies to cease business activity with Syphax.
The IATA suspended Syphax from the IATA Billing and Settlement Plan (BSP), effectively forcing the Sfax-based operator to ground its flights.
The IATA said the Tunisian air­line had been suspended from the BSP due to “non-compliance with the Passenger Agency Conference Resolutions concerning payment of outstanding overdue balances”.
BSP is a system maintained by the IATA to simplify sales and payments of services and operations among its 400 member airlines, which con­trol 83% of worldwide air traffic.
Calling the IATA’s decision “sud­den, surprising and obstructive”, Syphax blamed flaws in the BSP system but admitted to having “fi­nancial difficulties”, according to the company’s lawyer Samia Mak­touf.
Maktouf told Agence France- Presse (AFP) that “the local, na­tional and international contexts have caused a crisis that is behind this temporary suspension of Sy­phax Airlines’ activities”, referring to the ailing Tunisian tourism sec­tor, which was hard-hit by terrorist attacks in March and June.
Since June, Syphax has reduced flights, keeping mainly those to and from Tunisia and France, due to a drop in demand. Syphax proceeded to wet lease one of its two A390s to Morocco’s Royal Air Maroc for a few weeks.
Beyond the fraught geopolitical and economic context, Syphax had struggled since its founding in 2011.
In 11 months, three different chief executive officers succeeded found­er Mohamed Frikha, who left the company in September 2014.
In addition to instability in sen­ior management, Syphax competed with the state-owned national car­rier Tunisair.
Along with the the displeasure of its many creditors, Syphax has had to deal with the wrath of infuriated customers, some of whom were stranded in airports.
The company provided an email address where clients who booked flights after July 30th can apply for refunds.
Syphax and Frikha have been si­lent in the aftermath of the crisis despite the severe criticism of the airline. On August 7th, Syphax em­ployees participated in a sit-in in front of the company’s Tunis head­quarters.
They demanded intervention from the government to save the company and their jobs.
The airline will have to defend it­self in court, too, as a collection of employees, shareholders and tick­etholders is suing the company for refunds and damages.
Even though the amount of Sy­phax’s outstanding debts is un­known, Tunisian media speculated the airline will resort to “law #95”, which permits restructuring of fail­ing companies.
A government-sponsored bailout package is possible as well. On Au­gust 10th, a special cabinet meet­ing requested the government’s Bureau of Assistance to Struggling Enterprises examine the Syphax case “with special consideration to the social aspect of the company, namely its employees and techni­cians”, according to government spokesman Dhafer Neji.
This sudden crisis deals a hard blow to Syphax’s ambitions. The airline planned to inaugurate direct flights to and from Tunis, Montre­al, New York and Beijing and had placed orders to expand its fleet, composed of two A390-100 aero­planes. Last month, Syphax can­celled an order for three A320-200s placed in 2013.