13 - 19 April 2000
Issue No. 477
|Published in Cairo by AL-AHRAM established in 1875|
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Busier skies ahead
By Tarek Atia
Activities that support the tourism industry have been moving at a break-neck pace: hotels, resorts and amusements of every type are springing up in most governorates and along every shore. The obvious complements to all this construction are new and expanded airports and increased flexibility of airlines and flights, so that tourists can move from one destination to the next with greater ease.
New, privately-funded airports are being built at four tourist areas (Al-Alamein, Farafra and Al-Wahat, all in the Western Desert, as well as Marsa Alam along the Red Sea coast) and, at least in principle, EgyptAir's virtual monopoly on scheduled domestic flights is being opened up.
Legislation now permits private airlines to fly on lines not covered by EgyptAir, and during times not served by the national carrier.
"EgyptAir flies from Cairo to Hurghada at 6.00 and 7.00am, then at 9.00pm," said a top aviation official, "so why not run a 12 noon flight as well? The problem is that no one has stepped up and said they'll do it."
Few of the 28 companies that have been granted licenses by the Civil Aviation Authority to partake in everything from charter flights to crop dusting, hot air ballooning, cargo and air taxi services, have the money or the background to begin offering regular, scheduled flights. Because of their small fleets, EgyptAir has always considered these companies usurpers who, if they do try to jump in, are only thinking of short-term gains rather than entering the market to help it grow.
EgyptAir's chairman, Mohamed Fahim Rayyan, told a debate forum at Al-Ahram last week that while it took EgyptAir a long time to establish its extensive flight lines across the country, these new companies just want to take that leg-work "ready-made."
Whether or not the claim is true, most industry experts agree that EgyptAir could benefit from competition, since it would provide an incentive to improved services.
Mamdouh Hishmat, head of the Civil Aviation Sector, thinks the solution may lie in a little bit of creative thinking. Certain lines, in Hishmat's opinion, could be opened up to complement EgyptAir's existing services.
"Since most foreign tour groups arrive in Hurghada, for instance, and other resorts, on Saturday and leave on Thursday," Hishmat suggests, "why not offer regularly scheduled flights to Abu Simbel on Monday? It's such an easy trip. You only need a couple of hours there, then you'd bring them right back."
Both civil aviation officials and tour companies confirm that the airport in Abu Simbel has had the most traffic of any destination in the past three months, and EgyptAir only flies to Abu Simbel from a selected list of places that does not include Hurghada. The possibilities for increased business via a regular anywhere else to Abu Simbel line seem limitless.
So why isn't anyone taking up the offer? Hishmat's reasoning is that it's too costly and troublesome for the private airlines currently in existence to pursue the necessary infrastructure and legwork that such a project requires. "You would have to open up offices in both cities, deal with ground transport, travel agencies, etc."
The charter airlines that currently do fly to Abu Simbel have borne the brunt of recent complaints and a negative press campaign after it was revealed that some even refrain from paying the minimal, but extremely basic, fees to provide ground transport between their planes and the terminals at Abu Simbel airport, going against domestic and international regulations and placing passengers at risk.
Some aviation experts have suggested that these smaller airlines should look to larger, more experienced foreign carriers for increased investment to help them better serve the domestic airline sector. But judging from Rayyan's comment that EgyptAir's domestic flight prices are subsidised by income from its more profitable foreign flights, that may also be a dim possibility.
Investors may have to be prepared to move on all tracks at once, like businessman Ibrahim Kamel whose Al-Alamein airport project includes parallel ventures in both an airline and a resort. Hishmat also cites the Kuwaiti investor behind the Marsa Alam airport project currently being built, who plans on using it to service his tourist resort nearby.
As for airports, some wonder why private companies would want to take the government up on its offer to build them in the first place. Hishmat argues that airports are a great investment. He concedes that a lot of capital in a very short period of time is required, but says that after that there is big money-making potential to be had.
In other words, while $100 million might be spent in three years building the basic infrastructure (runways, buildings, services), after that the airport owners get a cut of everyone and everything that touches the airport. Aside from the landing, take-off and parking fees of the planes themselves, there is a percentage off the petrol used by the airplanes that fill up at the airport, and all the space needed by banks, stores, airline companies and catering outlets that will want to open up shop in addition to visitor entrance and parking fees. And the list goes on.
The idea for a new terminal at Cairo International Airport, which has been on the table for nearly a decade, is also based on long-term planning and the possibility for major profits. The project is now being discussed as either a Build Operate Transfer or government-funded endeavour. No final decision has been made on this matter yet, but the goal is to increase the airport's capacity from its current nine million passengers a year to around 20 million by 2010.