Monday,27 May, 2019
Current issue | Issue 1343, (4 - 10 May 2017)
Monday,27 May, 2019
Issue 1343, (4 - 10 May 2017)

Ahram Weekly

Flying high

Safwat Musallam, the chairman and CEO of EgyptAir Holding Company, talks to Nevine El-Aref about the 85th anniversary of the national carrier

Flying high

EgyptAir was founded in May 1932. Eighty-five years later it is still going strong, flying to 75 destinations in the Middle East, Europe, Africa, Asia and the Americas. It has constantly improved its fleet, and is in the process of taking delivery of nine new Boeings — the 737-800 (B738) — which will have their tails painted with a specially commissioned 85th anniversary design rather than Horus, the sky deity the airline normally uses as its logo.

Egypt has already received three of the nine new aircraft, increasing EgyptAir’s B738 fleet to 23.

“We are proud to celebrate EgyptAir’s 85th anniversary with its loyal employees who have built the African and Middle East’s leading airline,” said Safwat Musallam, chairman and CEO of EgyptAir Holding Company.

“We start our 85th anniversary by renovating the fleet through buying nine new Boeing aircraft with the latest onboard services,” Musallam told Al-Ahram Weekly. Three have already been delivered and the remaining craft will arrive this year, with the final plane scheduled to go into service in December.

The new aircraft passenger cabin has wider seats, larger overhead lockers and curved ceiling panels.

“The newly acquired planes consume lead fuel, a saving that we will be able to pass on to our customers in lower ticket prices,” said Musallam.

Flying high

The Boeings will serve European routes, and will be supplemented next year by 35 B738 aircraft the last one of which is due to be delivered in 2021.

To mark its birthday EgyptAir is publishing a book relating the history of the company. The volume will include an image of the company’s royal charter signed by King Fouad in 1932 as well as photographs of prominent figures who have travelled onboard its planes.

“EgyptAir has a very loyal customer base which helps us compete in a crowded market,” says Musallam. “It is a market that is distorted by the fact that some national carriers are massively subsidised, yet EgyptAir still manages to compete internationally and on domestic routes.”

Musallam explained that EgyptAir has recently implemented a process of streamlining, cutting costs without compromising service, safety or employees’ salaries.

“We did not cancel any routes as part of the streamlining exercise apart from to and from Japan and we did that because following the 2011 Revolution the Japanese market collapsed for us. It’s slowly reviving so last month we started flying to Japan again, once a week.”

China is another story altogether. Traffic, both business and tourism, has increased steadily for the last six years and is still growing.

But shouldn’t EgyptAir also operate charter flights to countries where it does not have scheduled services in a bid to boost the tourism industry?

“Air Cairo, the subsidiary company of EgyptAir, does operate charter flights on demand,” points out Musallam.

And how did the floatation of the Egyptian pound affect business?

“The floatation was essential to boost Egypt’s economy but like any policy it has advantages and disadvantages,” Musallam told the Weekly. Three of the nine companies that fall under the umbrella of the EgyptAir Holding Companies have been adversely affected by the floatation while four others — the Egypt Free Shops Company (duty-free), Supplementary Industries, the Ground Services and the Maintenance and Engineering Companies have gained because they sell products priced in US dollars.

The airline, which is the core of EgyptAir Holding Company’s business, has been affected in two ways. Operation costs have increased because 85 per cent of them are priced in US dollars, and customers have found their own purchasing power decreasing. Now, says Musallam, local customers think twice before travelling, even though ticket prices have not been raised in line with the devaluation of the Egyptian pound.

The floatation has also had an impact on the company’s balance sheet as debt servicing of loans denominated in dollars has increased.

“EgyptAir Express, the subsidiary company in charge of domestic and regional routes loses out because of low ticket prices. But there is a limit to any price increase that the domestic market can bear. Flight operation costs have tripled, but this doesn’t mean we can triple ticket prices. EgyptAir, after all, is a national company, and we have to provide services at a price that is acceptable to Egyptians.”

“Our ticket prices are often below those offered by other international airlines.”

This year, says Musallam, the company introduced new pricing structures that reflect whether a customer is carrying luggage or not.

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