Tunisian operator, Syphax Airlines (FS) says it expects to generate revenues of USD9.9million (TUD16million) in 2014 to grow to USD26.6million (TND43million) expected in 2017 on the back of a projected growth rate of 85.6%. While revenue projections remain ambitious, the airline does not expect to make a profit for 2012 or for 2013. However, despite this, the airline is planning an IPO in order to raise further capital for use in building new facilities as well as a acquiring new aircraft needed in its international expansion drive.
Speaking last week in Tunisia during the company's financial results presentation, CEO Mohamed Frikha also outlined his carrier's medium/long term expansion plans which, in 2014, will include three flights a week to the UK departing from Sfax and Tunis, a daily
flight to Italy and an "almost" daily flight to Germany, taking it head to head with local rival, Tunisair(TU).
It is to be recalled that Syphax, in January, signed a Memorandum of Understanding (MoU) with Airbus SAS for USD600million for the purchase of three Airbus A320NEO, three Airbus A320CEO with four options. The airline will take delivery of its first A320CEO in 2015, while the new A320NEO aircraft are scheduled to begin delivery in 2019. Additionally, Airbus is to set up a design and production facility specializing in aerospace electronic systems.
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| Syphax's planned expansion drive (Syphax) |
Using its rapidly expanding fleet, Syphax has outlined the following routes to be launched from May 2013 onwards:
- Morocco: 2 weekly flights Casablanca
- Middle East: 2 weekly flights to Saudi Arabia, Jeddah.
- Central Africa: 2 weekly flights to Côte d'Ivoire and Burkina Faso
- Asia: 1 weekly flight to China, Beijing with Tokyo, Japan also a possibility
- North America: 1 weekly flight to Canada (Montreal) and another weekly flight to the United States (New York).
- South America: 1 weekly flight to Brazil (Rio de Janeiro).
In terms of competition, Syphax will be competing with a resurgent Air Algérie (AH) who recently announced its intention to "open flights to South Africa, Brazil, China, Nigeria, the Netherlands and the United States."
During the course of this year, using funds raised through an IPO, Syphax plans to invest in a Dassault Falcon for use on charter operations with several firms to serve "the largest airports in the world" in Poland, Hungary, Croatia, Slovenia, France, Belgium, Czech Republic, Italy, the UK, and Switzerland.
Over USD9million will also be used in the development of its MRO hangar and the construction of headquarters. In 2014, an upgraded hangar is to be built worth USD20million.
Mohamed Frikha said that these investments reflect his company's growing confidence in Tunisia's economic recovery.
"It's a commitment on our part in this process," he said. He explained further that his company, through this IPO, is trying to raise the funds needed to develop its business in order to attain better positioning on international markets.
As
part of its IPO on the Alternative Investment Market, Syphax Airlines will
open its capital to purchase with 2'500'000 new shares available at a fixed price of TND10/share thereby representing 45.45% of the company's capital after the increase. Subscriptions were opened on Tuesday, April 30, 2013 and will close on Monday, May 20, 2013.
