When Atef Abel Hamid, who like many Egyptians uses the title Engineer or Eng, took the reins at EgyptAir he found an organisation that had grown uncontrollably, with an excessively large workforce of around 25,000.
“I discovered that there were numerous activities, much duplication and interference, without a clear picture on what each was doing,” the carrier’s chairman recalls. “We sustained heavy losses, and had high costs and low revenues. We brought in Sabre Airline Solutions, which assessed the complete operation, and recommended the creation of separately structured profit centres.”
As a government entity, to enable this restructuring a special law had to be passed, which created the EgyptAir Holding Company, of which Hamid is the chairman, to control the eight subsidiaries. These are the EgyptAir airline, cargo, training, maintenance and engineering, ground services, in-flight services, tourism and duty-free, and medical services.
“This advice proved to be excellent because we achieved good results after only two years,” says Eng Atef. In its 2003/2004 financial year to the end of June, EgyptAir achieved a net profit of EGP303 million ($55 million), and followed up in 2004/2005 with an increased result of EGP443 million ($80 million). The latest results, still to be published, will be even better with profits coming from all divisions.
As to the future EgyptAir will focus on the development of its network, building Cairo into a major crossroads linking Africa with Europe and the Middle and Far East, and expanding the fleet. “We currently have 42 aircraft and want to increase the fleet to 64 aircraft by 2010. We already have a contract with Boeing for 12 737-800s and recently signed up for six 76-seat Embraer 170s for our new division EgyptAir Express. We also have options for another six aircraft which we intend taking up.”
The Express operation is a major departure for the carrier. “We have in our present fleet only medium-range and long-range aircraft,” says Eng Atef. “The 737-800 is too expensive to operate on our domestic network with flights of no more than one hour. As a result, fares for the local population are too high. We want to present a low-cost product to the public. But, of course, we have to maximise our income and will be operating the aircraft also on profitable regional routes to the Gulf.”
An important part of the airline’s strategy for hub status in the region is the development of Cairo International Airport. The carrier is working with the airport to activate this strategy, and Eng Atef has been appointed by the Ministry of Transport as chairman of a committee, together with the chairman of the airport holding company, to move this project forward.
A new building, Terminal 3, is under construction for completion in 2008, which will be taken over by EgyptAir and a new global alliance partner. “We have approached the Star Alliance and have had a positive response,” says Eng. Atef. “I believe we will succeed in this endeavour.”
Expansion of the network in Africa is still mired in the inactivity of many of the countries that signed up to the Yamoussoukro Decision. “It is a real problem, and I think that a region by region approach has more chance of succeeding, it is for this reason that we have come up with a new idea. On our initiative, the African Airlines Association is proposing to establish a Club of the Ready and Willing, interested airlines which are capable of convincing their governments and civil aviation authorities to open the sky to free movement of people and good. I believe it will motivate those lagging behind.”
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