The state airline carrier Air Algerie is planning to reduce its fares. The company is said to be seeking ways to move away from fixed fare pricing to a model used by most companies in the world with fluctuating prices based on the period, destination and time.

This change of pricing model is expected to drive airfares down whenever the model is clearly defined and adapted. Sources say the company plans to implement this change as early as winter 2000-01.

Speaking before a group of journalists, the company CEO, Benouis, indicated that these changes are necessary to bring Air Algerie to current industry standards worldwide. He also spoke of increasing competition and pledged that competing companies would not control more than 10% market share on the Algerian market.

Benouis however admitted that his company is already facing a different of competition. He revealed that Air Algerie has lost many employees to competition due to attractive wages offered by the newly established private carriers.

Speaking about the peak summer season, the number of passengers serviced by Air Algerie domestically between northern and southern airports rose by 15.5% year-on-year to 174,847. Sales through Air Algerie's own ticketing agencies rose by 19% and revenues generated by accredited independent travel agents increased by 81%.

Benouis recognized that company representatives in key markets such as France have in the past mistreated customers. But the official pledged that a new policy is in the making that would increase customer satisfaction. Benouis added that Air Algerie will get its fourth new generation Boeing aircraft at the end of October. The company is undergoing a fleet renewal program and the cost of maintaining the current fleet is draining tremendous financial resources. Air Algerie spent $12 million to standardize 13 mid-range aircraft on European and international norms. The carrier, which says it intends to open a service to Montreal, Canada, will make operational changes in its freight business, which accounts today for 12% of its overall revenue.

In face of global consolidation and the emergence of alliances among foreign carriers worldwide, Benouis says his company will not be isolated and plans to negotiate partnership deals. Talks are currently underway with the Italian carrier Alitalia that are expected to be finalized at year's end.

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Email: Mourad Teyeb