Airline tickets skyrocket
The plunging Egyptian pound has led to skyrocketing air-ticket prices. Amira Ibrahim reports
In response to the continuing depreciation of the pound following its floatation, EgyptAir, as well as foreign airlines in Egypt, have raised the prices of international flights bought in the country.
The national carrier, together with foreign airline representatives, approved an increase of international flight prices in order to overcome losses caused by the pound's devaluation.
Representatives of 11 foreign carriers -- Saudi Airlines, Emirates Airlines, GulfAir, Middle East Airlines, Qatar Airlines, Kuwait Airlines, KLM, Iberia, British Airways, Swissair and Air Malaysia -- met with EgyptAir officials to agree on the fare hikes.
Speaking to Al-Ahram Weekly, EgyptAir's commercial sector director, Said El-Zumor, said that international flight fares originating in Cairo have been raised by 10 per cent as of 1 March, while prices at the company's branches abroad will remain unchanged.
"Aviation and national carrier officials have been studying the effect of the recent economic procedures on our financial system," El-Zumor said. "Our problem is not as serious as foreign airlines', but still we have obligations to be funded in foreign currencies. We even have to buy services and pay fees in dollars at some Egyptian airports."
EgyptAir had to approve the hikes to avoid a gap in prices between the national carrier and foreign ones, he said.
"We need to examine the effects of the increase on our sales. Within three or four months, we may be compelled to add another five per cent to prices to stay in tune with foreign airline prices," El-Zumor said.
According to International Air Transport Association (IATA) regulations, an increase of more than six per cent in the dollar exchange rate in any country should lead to a similar rise in ticket prices for international flights from that country.
Although foreign airlines working in Egypt have applied a 20 per cent increase in prices -- since the Egyptian pound lost 18 per cent of its value as a result of the floatation -- their financial troubles have still not been assuaged.
"We are committed to dealing in Egyptian currency in selling and marketing. Accounts are exchanged and transacted according to rates announced by the central bank," said Mustafa Shinnawy, sales manager of Saudi Airlines' Cairo branch. "Now, due to the shortage of foreign currency in Egyptian banks, we have considerable sums in Egyptian currency that lost 18 per cent of their value. It is a serious problem that faces all foreign airline branches working in Egypt."
Shinnawy said airlines need to prepare themselves to handle the drop in demand after the price hikes. Foreign carriers plan to ask the Egyptian government to approve a new system of pricing based on the daily dollar exchange rate announced by the authorities.
"We are discussing a system similar to the one international hotels apply in Egypt -- to sell the tickets in Egyptian currency but set the prices according to the dollar rate. This way, we do not have to get permission from the authorities whenever the dollar goes up," he said.
