(Ecofin Agency) - Air Algérie plans to establish a low-cost subsidiary to boost its competitiveness and profitability, the firm’s CEO, Mohamed Abdou Bouderbala, said on November 22. “This will increase our revenues and help us become more competitive”, he said, highlighting that the new entity would operate private and charter flights as well as provide air-taxi services and medical evacuation..  

Named “Air Algérie Services”, the new low-cost subsidiary should be active by 2016 ending.

Its establishment falls within a restructuration scheme which aims to revitalize the state-owned airline that according to its president generates “insufficient profits”.

This restructuration plan also includes the establishment of other subsidiaries. Among these are “Air Algérie Cargo” dedicated to the transport of goods which should be launched at the end of 2015, and “Air Algérie Handling” for the boarding and check-in of baggage which should be operational at the beginning of 2017. Additionally, a subsidiary specialized in plane maintenance will be established in July 2016.

This modernization plan is one of the conditions set by Algerian Minister of Transport, Boudjama Talai for the implementation of open Sky in the country. A month ago, Mr. Talai indeed said that “when the national airline Air Algérie could offer its customers high-quality services respecting international standards and on par with other airline companies, then only, would the open Sky become a reality, opposed by none”.