A number of international airlines, including British Airways, Air France-KLM and Brazil’s TAM Airlines, have threatened to suspend ticket sales to Egypt due to issues with repatriating their revenues.
Air France-KLM told Reuters last week that its earnings have been trapped in Egypt since October and that the airline is owed more than EGP 100 million (USD 12.77 million).
“It is a very, very serious problem because all our revenues are blocked at the bank, but at the same time we do have all the same costs ongoing like leasing the aircraft, the fuel, the staff, overflying rights, ground handling etc, which have to be paid in dollars, so how do you suppose that we can sustain these operations?” Cees Ursem, Egypt’s country manager for the airline, said.
Emirates Airline also reportedly has between USD 80 and 90 million in profits trapped in the country, while Lufthansa has struggled to repatriate USD 15-17 million and Air France-KLM about USD 12 million.
According to financial news website Al-Borsa, head of the Egyptian Travel Agents Association Elhamy El Zayat said the total amount of foreign airline revenues currently trapped in Egypt is USD 480 million.
In an attempt to avoid a further crisis, British Airways decided it would no longer accept cash payments for tickets and will only allow tickets to be purchased using credit cards, Al-Masry Al-Youm reported.
However, a source at the Central Bank of Egypt reportedly told Reuters that the issue has been “totally resolved,” although the report did not clarify what decisions have been reached or how the airlines’ concerns have been quelled.
The statement came soon after Emirates Airline threatened it would decrease flights to Egypt by 75 percent, from 20 flights per week to only five.
The trouble with repatriating profits is a result of harsh restrictions put in place by the CBE in an attempt to curb the depletion of the country’s foreign currency reserves, which have gone down more than 50 percent since the 2011 ouster of Hosni Mubarak.
Egyptian authorities are currently attempting to revive the flow of tourism – once the country’s main source of foreign currency – but a string of security incidents, most notably the downing of the Russian plane last October and the brutal murder of Italian student Giulio Regeni in January, has significantly hampered said efforts.