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Air Algérie Secures Financing for Fleet Renewal Plans
Air Algérie, in its bid to renew its fleet, had secured financing from the Fonds National d’Investissement (FNI), Algeria’s state-owned national investment fund. The financing is expected to support the acquisition of 15 new aircraft, including eight Boeing 737-9 MAX, five Airbus A330-900 NEO, and two A350-1000 aircraft, which were ordered earlier this year. The resource credit agreement was signed between the FNI and Air Algérie on July 3, marking a major milestone in the carrier’s fleet modernization strategy, reports CH-Aviation.
While the specific details of the financing arrangement have not been disclosed, this development underscores the Algerian government’s commitment to supporting the national carrier in its efforts to enhance its fleet and improve its operations.
The fleet renewal plans aim to replace older aircraft and meet the growing demand for air travel in the region. On average, the state airline’s aircraft are 15 years old, but 20 of the current 55 planes are more than 20 years old. The airline is looking to retire twelve Boeing 737-600s and -800s, which are among those over 20 years old. Four 18-year-old Airbus A330-200s will also soon need to be replaced.
Replacing Old Fleet
Four years ago, the Algerian government gave the airline the green light to purchase new aircraft. After the pandemic, the airline began obtaining offers from manufacturers.
In May, Air Algérie announced its order for eight Boeing 737-9 MAX aircraft, per Airspace Africa, further solidifying its long-standing partnership with the American manufacturer. Additionally, the carrier signed a Memorandum of Understanding (MOU) for two Boeing 737-800(BCF)s, or Boeing Converted Freighters, which will support its cargo operations. The delivery of these new passenger jets is scheduled to commence in 2027, allowing Air Algérie to introduce modern and fuel-efficient aircraft into its fleet.
Simultaneously, Air Algérie confirmed its firm order with Airbus for the remaining seven wide-body aircraft, including five A330-900 NEOs and two A350-1000s. The deliveries of these Airbus aircraft are planned to begin in the second half of 2025, with four expected in 2025 and the remaining three in 2026. The addition of these wide-body planes will enable Air Algérie to expand its long-haul operations and offer enhanced services to passengers.
As part of its fleet renewal strategy, Air Algérie also sought to dry-lease additional aircraft. The carrier’s requirements included four General Electric-powered A330-200/-300s, two A330-900 NEOs, two Boeing 737-900s, and two Boeing 737-9 MAX aircraft. Bids for this leasing round were recently opened, marking another step in the process of augmenting the airline’s fleet.
Air Algérie has been dependent on government funds for years. Without repeated government cash injections, the airline would have gone under long ago. A former airline chief once summed up the general condition of the airline as follows: negative operating results, high levels of debt, little liquidity, overstaffing, and an inability to finance investments.
With the financing secured from the FNI, Air Algérie is on track to execute its fleet renewal plans and usher in a new era. The modernization efforts will position Air Algérie as a leading player in the region, offering a superior travel experience to its valued passengers.
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