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EgyptAir Undergoes Restructuring Amid Service and Financial Challenges

January 22, 2024
Photo credit: Wikimedia Commons.

The authorized share capital of EgyptAir Holding Company has witnessed an increase to EGP 10 billion (USD 323 million), along with a corresponding rise in the number of shares. The value of each share has increased to EGP 1,000 (USD 32.3), as per the decision of the Minister of Civil Aviation, No. 1250 for the year 2023, published in the official gazette on Saturday, 20 January. The decision comes in an effort to mitigate the recent downfall of the country’s flagship carrier.

The recent removal of EgyptAir from both the top 100 global airlines list and the top 10 Arab airlines list has led the Tourism and Civil Aviation Committee of Egypt’s House of Representatives to propose a comprehensive restructuring of the EgyptAir Holding Company on 17 January. 

This recommendation aims to address recent shortcomings in the airline’s services.

In 2023, EgyptAir fell out of the top 100 global commercial airlines ranking published by Skytrax Global Airlines, slipping from its 95th position in 2022. The ranking is based on surveys among international travelers.

In February 2023, Minister of Civil Aviation Mohamed Helmy attributed the company’s weak performance and losses of EGP 30 billion (EGP 970 million) in 2022 to the depreciation of the Egyptian pound against the US dollar since the devaluation wave began in 2016, coupled with the surge in aviation fuel prices.

The Egyptian aviation company also garnered a three out of five-star rating according to published by Skytrax, indicating an average score across the criteria the company employs for classifying airlines. These criteria include the quality of the airport, onboard products, employee service, and amenities, signaling a decline in the company’s overall system.

The committee met with the participation of Helmy, representatives from EgyptAir, and other notable figures. Nora Ali, the committee’s chairperson, highlighted EgyptAir’s significant standing as one of the oldest airline companies in the Arab region, holding the second position in Africa.

“The company was the first in the Middle East and seventh worldwide to become a member of the International Air Transport Association,” she stated.

Ali emphasized the critical need for EgyptAir to conduct regular and thorough safety and security assessments, especially in the areas of aircraft leasing and procurement agreements. She highlighted the significance of maintaining rigorous standards in performance evaluation.

The committee advocated for the introduction of competition from the private sector to stimulate growth, enhance services, and foster competitive pricing, ultimately contributing to an upswing in tourist numbers.

During the session, Helmy reported that investments in air transport had reached EGP 28.83 billion (USD 660 million) from 2014 to 2023, encompassing various improvements. He noted a rise in passenger numbers from 33 million in 2015 to 43 million in 2023, with a target of reaching 109 million passengers by 2030.

Helmy recently indicated an improvement in the company’s financial performance indicators in the first quarter of FY 2023/2024, with a planned increase in the company’s fleet from 71 to 81 aircraft.

Prime Minister Mostafa Madbouly chaired a meeting on 15 January to review the strategy for the development of Egyptian airports. The meeting was attended by the minister of Civil Aviation, and Mahmoud Esmat, Minister of Public Business Sector, along with officials from the Ministry of Civil Aviation.

Madbouly emphasized the importance of involving private sector companies in the management and operation of airports. This strategy aims to improve passenger services and increase revenues.

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