Volotea Swoops Into Algerian Market Gap Left By Aigle Azur Collapse

Volotea is to add eight routes to Algeria in September, with seven Algerian airports joining its network. While all but one route will face direct competition, Volotea is exploiting the gap left by Aigle Azur, which was the second-largest carrier from France to Algeria.

Volotea has announced eight routes from France to Algeria, a significant network development for the low-cost carrier (LCC). It will have 20 weekly departures altogether, across three French airports and seven in Algeria. And they’ll be short routes: an average of just 575 miles, firmly in the one-to-two-hour sweet spot for LCCs.

The route details are:

1. Bordeaux-Algiers: Begins September 16th, twice-weekly
2. Lyon-Sétif: Begins September 17th, three-weekly
3. Marseille-Annaba: Begins September 18th, twice-weekly
4. Marseille-Béjaïa: Begins September 18th, twice-weekly
5. Marseille-Constantine: Begins September 18th, twice-weekly
6. Marseille-Oran: Begins September 16th, four-weekly
7. Marseille-Sétif: Begins September 16th, three-weekly
8. Marseille-Tlemcen: Begins September 17th, twice-weekly

Heavy competition from Air Algerie

All but one route will have direct competition with Air Algerie in the week that Volotea begins, but Volotea will be able to very easily undercut the flag carrier. The competitive scene will be:

1. Bordeaux-Algiers: three-weekly departures with Air Algerie
2. Lyon-Sétif: five-weekly
3. Marseille-Annaba: four-weekly
4. Marseille-Béjaïa: twice-weekly
5. Marseille-Constantine: six-weekly
6. Marseille-Oran: seven-weekly
7. Marseille-Tlemcen: once-weekly

Air Algerie will have 28 weekly flights across these routes. The only one that Volotea won’t face direct competition on is Marseille-Sétif, which Air Algerie operated until early 2020, OAG shows.

Volotea driven by the end of Aigle Azur

All eight routes used to be served by Aigle Azur alongside Air Algerie, data from OAG indicates, but Aigle Azur ceased operating in 2019. The French carrier was the second-largest between France and Algeria when it ended; it had 1.2 million seats and a 21% share of the market. At its peak, it had over two million seats a year and a 40% share.

The airline was crucial to the market. Since then, Air France and its lower-cost subsidiary, Transavia France, have taken up some of the slack, with multiple new routes and the highest capacity to date. But the gap left is still significant.

Aigle Azur ended all but two of Volotea’s coming routes in 2019, while Marseille-Annaba stopped in 2018 and Bordeaux-Algiers in 2017.

Massive VFR demand, but problems

Up to five million people of Algerian descent or nationality live in France, a phenomenal diaspora. The demand for visiting friends and relatives (VFR) is, therefore, huge. This market segment is exceptionally price-driven and is normally considered the ‘lowest of the low’ in yield terms. It’s therefore perfect for LCCs like Volotea who can, with the right environment, strongly stimulate demand and grow the market.

But there are problems that make Algeria much more complicated and its aviation development far less straightforward or certain than, for example, Morocco. While Morocco and the EU have open skies, resulting in huge growth from LCCs from France and elsewhere, Algeria still has the (old-fashioned) bilateral traffic rights in place.

Will Algeria open up more?

It’s partly for this reason that France-Algeria is still dominated by Air Algerie, whose share of the market has risen to almost seven in ten seats. LCCs, which open up markets through new routes and lower fares, have just 16% of the market, against 52% for Morocco-France.

Algeria would be ripe for stimulating if it were more open. And also if it were more LCC-focused, with the country currently not particularly set up for quick turnarounds. This explains why Volotea is scheduling 40 minutes on the ground against its usual 25, but this shows the progress made to date: others, such as Transavia France, currently schedule one hour.