Tunisia Blocks Tunisair Sale While Drip-Feeding State Support
Africa · Northern
Key Facts
—Ownership. The Tunisian state holds 74% of Tunisair and treats it as a strategic public asset.
—Debt. The carrier’s debt burden is described as “alarming” by the transport minister, with chronic deficits and heavy state subsidies.
—Restructuring Plan. A programme envisages 1,200 job cuts, a bond issue of TND 150 million (USD 51.5 million), and asset sales.
—Presidential Veto. President Kaïs Saïed has repeatedly declared that selling Tunisair is “non-negotiable,” blocking any privatisation.
—Geopolitical Tool. Tunisair plans new long-haul routes to the United States and China, explicitly framed as instruments of “economic diplomacy.”
Tunisia is attempting a delicate Tunisair restructuring, shifting from open-ended budget bailouts to conditional loans and asset sales while a presidential veto keeps the loss-making carrier firmly in state hands.
The Great Tunisair Balancing Act
The narrative of a clean state withdrawal from Tunisair is premature. The government is not cutting the airline loose, nor is it opening the door to privatisation.
Instead, Tunis is engineering a complex shift in how support flows. Direct cash injections are being replaced by state-backed loans, bond issues, and debt restructuring.
A Financial Black Hole with a Sovereignty Shield
Tunisair’s finances are dire. Transport Minister Rachid Amri has publicly labelled the carrier’s debt burden “alarming,” while the US Department of Commerce notes it “remains heavily subsidized by the government.”
The airline suffers from chronic deficits and one of the highest staff-to-aircraft ratios in the industry. Its shares on the Tunis Stock Exchange trade near historic lows of TND 0.37, reflecting deep market scepticism.
Yet President Kaïs Saïed has erected an ideological firewall. “It is out of the question to cede Tunisair, neither today nor tomorrow,” he declared, denouncing those who “dream of seeing this institution sold to private interests.”
Inside the Tunisair Restructuring Plan
With privatisation blocked, technocrats are pursuing a survival strategy. A shareholders’ meeting approved a bond issue of TND 150 million (USD 51.5 million) to shore up liquidity.
The state has also arranged a USD 15 million credit line via the Central Bank and the Arab Trade Financing Program. This sits alongside a TND 35 million loan from state-owned Banque Nationale Agricole.
The broader plan envisages 1,200 job cuts over three years, costing TND 170 million (USD 56 million). A capital increase of TND 1.2 billion is also on the table, alongside the expedited sale of grounded aircraft.
The Search for a Strategic Partner
The government’s compromise is the search for a “strategic partner.” This entity could buy part of the state’s shares and finance a capital increase.
However, any stake is capped at 49% or less, ensuring state control remains absolute. Analysts warn that in its current state, no rational investor would touch the airline without full management control.
Economic Diplomacy and the Great-Power Contest
Tunisair is not just a commercial entity; it is a tool of foreign policy. The airline plans new long-haul routes to New York, Washington DC, and China by 2028, explicitly framed as “economic diplomacy.”
Analysts note some of these routes do not make commercial sense. They are driven by a political strategy to position Tunisia as a bridge between global powers, a theme explored in our pillar on Africa: The New Scramble.
This balancing act sees Western donors pressing for SOE reform while Arab funds provide trade credit and China eyes aviation infrastructure deals. Tunisair sits at the centre of this contest for influence.
A Microcosm of Tunisia’s Fiscal Crisis
The airline’s fate is tied to Tunisia’s wider economic stress. The country faces external debt above USD 40 billion and a public debt ratio projected around 80.5% of GDP by 2025.
Every Tunisair bailout is a politically sensitive allocation of scarce resources. Reforming loss-making state-owned enterprises is central to IMF and donor conditionality, making the carrier a symbolic test case for the entire economy.
The powerful UGTT union opposes privatisation but accepts the need for reform. This creates a three-way power struggle between the presidency, the union, and technocrats trying to keep the airline solvent.
What to Watch Next
The immediate focus is on fleet reactivation. Minister Amri announced 14 aircraft would return to service by May 2025, explicitly “without resorting to privatisation.”
The deeper question is whether bond markets and creditors will continue to accept the implicit sovereign guarantee behind Tunisair’s debt. As Tunisia’s fiscal room shrinks, the airline’s survival strategy of perpetual drip-feeding faces its sternest test yet.
Connected Coverage
Frequently Asked Questions
Is Tunisia privatising Tunisair?
No. President Kaïs Saïed has repeatedly vetoed any sale, calling it “non-negotiable.” The government is restructuring the airline and seeking a minority strategic partner, but full state control will be maintained.
How much debt does Tunisair have?
The transport minister has described the debt burden as “alarming,” though a precise consolidated figure is not publicly fixed. The airline remains heavily subsidised and is running chronic deficits, with a recent bond issue of TND 150 million (USD 51.5 million) approved to manage liquidity.
Why does the state keep supporting Tunisair?
Tunisair is viewed as a strategic asset for national connectivity, tourism, and economic diplomacy. The presidency frames it as a symbol of sovereignty, while its collapse would trigger major job losses and political fallout, making withdrawal politically impossible for now.
Sources
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