Issue No. 602
Economy
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5 - 11 September 2002 Issue No. 602 Economy |
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| Published in Cairo by AL-AHRAM established in 1875 | Recommend this page | ||
Permission to fly
Egyptian private airlines can now fly scheduled routes within the region, but bureaucratic obstacles abound. Sherine Nasr investigates
When Ahmed Shafiq, minister of aviation announced that private airlines will be allowed, for the first time, to fly regularly within the region, the few companies still operating in the industry believed that they were about to witness a revolution. Much to their chagrin, the new decision has led to few tangible changes.
"Private airlines have never flown regularly between Arab states before. In the past, EgyptAir was the only company able to do this," said Said Saber, chairman of Aircraft Maintenance Corporation (AMC), one of the largest private airlines. Saber underlined that this latest decision is part of a new initiative aimed at revolutionising the civil aviation sector.
Although private companies have been granted approval to fly by the government, they are still unable to get permission from other Arab countries. "Except for Al-Sharqa, none of the Arab countries we applied to gave us the approval to fly," said Saber.
Saber explained that the market is divided, according to set quotas, between EgyptAir and the flag carriers of other Arab states. "To fly regularly would mean cutting EgyptAir's quota. This will be impossible to achieve unless the government forces EgyptAir to do so for the sake of the private companies," he said.
But not all private companies face this problem. Shorouk is perhaps the luckiest private airline in the industry, as it is 51 per cent owned by EgyptAir. However, chairman, Captain Zaher Zaki, who came to office only a month ago, stresses that Shorouk is not affiliated to EgyptAir, nor does it operate under EgyptAir supervision. "This is a 100 per cent private company. We are not governed by the national carrier's rules," he said.
However, EgyptAir's 51 per cent ownership has certainly made things easier for the private company. For example, Shorouk was immediately granted approval by El-Sharqa and Kuwait to fly regularly and negotiations with Saudi Arabia are already underway. Shorouk has already established regular flights from Luxor and Alexandria to Al-Sharqa and Kuwait and hopes to fly from Assuit soon.
"We are glad that one of the impediments to operation has been removed. Now, we must work on two fronts: First, to get rights for more scheduled flights; second, to make arrangements with tour operators to fly charter flights," said Zaki.
To enlarge its scale of operations, Zaki explained that Shorouk aims to take advantage of every national airport it is allowed to use in Egypt and abroad. "Shorouk is the only private company to fly from Marsa Alam, the newly developed tourist area on the Red Sea that is attracting a growing number of Arab as well as foreign tourists," he added.
In fact, gaining rights access has always been easier for Shorouk than other private companies. "When there are technical difficulties on certain routes, EgyptAir always resorts to Shorouk to fly on its behalf," said Zaki. He explained that Shorouk represents part of EgyptAir's capital, and, as such, it is natural that the two work closely together.
Private airlines are in agreement that the government's latest decision would have been economically viable had it been effective. "Undoubtedly, it would have been very profitable for us to fly regularly to other Arab countries. Therefore, we are ready to exert every possible pressure to make this decision effective," said Saber. However, he wasn't clear on what kinds of pressure the private airlines will exercise over the ministry. He did stress that it is about time private companies receive equal treatment to EgyptAir.
Private airlines in Egypt have witnessed serious difficulties in the aftermath of 11 September, as tourist traffic dropped dramatically. "Weekly flights dropped from an average of 35 to 3 in the first week following 11 September," said Zaki.
None of the private companies in Egypt were given any support to overcome the crisis. "We had to pay our banks. We had to pay all fees and expenses while tourist traffic worldwide was close to nil," said Saber.
Desperate to survive, companies adopted different tactics. Companies looked for alternative sources of revenue. AMC, for example, managed to buy 51 per cent of the national carrier of Mali after it went bankrupt.
"The prospects look good, particularly as Air Afrique, a company responsible for air transport in 11 African countries, has now gone bankrupt," said Saber.
Shorouk has tapped the Scandinavian markets to find new customers. "Meanwhile, we are restoring our connections with Spain and Greece. Today, the picture is less gloomy," confirmed Zaki.
Nevertheless, private airlines in Egypt are still vulnerable. For one, they are burdened with extremely high ground, parking and maintenance fees. "The ministry still needs to remove many obstacles if it wants to improve the civil aviation sector," said Saber.
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