Egypt's flag carrier plans to double traffic, expand fleet, capitalise on Cairo airport upgrade and sell 20% stake
EgyptAir is planning major network and fleet expansion in conjunction with its acceptance into the Star Alliance.
Star's chief executive board in October accepted EgyptAir as its first Arab and second African member after South African Airways. At a ceremony announcing its acceptance, EgyptAir chief executive Atef Abdel Hamid outlined plans to turn Cairo into a hub for North Africa and the Middle East, aided by the expansion of Cairo's airport.
"Egypt has a strategic location which offers a good link between Africa, the Middle East and Europe to the rest of the world," Hamid says. "EgyptAir's membership in Star Alliance along with the strategic location of Cairo Airport will create a hub for the alliance members and a gateway for the Middle East and North Africa."
From left to right, Hamid poses with Egypt civil aviation minister Ahmed Shafik, Albrecht and Lufthansa chief executive Wolfgang Mayruhber
Star Alliance chief Jaan Albrecht describes EgyptAir as an "ideal network fit" for the group and says the carrier will offer connections to markets which have been under-served. EgyptAir and current Star members will co-locate at Cairo's new $393 million Terminal 3 when it opens next year. "The infrastructure at Terminal 3 gives us an opportunity to build a new hub in North Africa," Albrecht says.
The new terminal will have capacity to handle 11 million passengers per year, compared to the 7 million at Terminal 1, which EgyptAir currently uses. Hamid is already pressing for further expansion of Terminal 3 to accommodate another 5 million passengers because EgyptAir's passenger numbers are expected to reach 11 million by 2011. "This will not be enough. We are in discussions [with the airport] to further extend and to add another finger [to Terminal 3]," he says.
To support the growth Hamid says EgyptAir will expand its fleet over the next five years from 49 to 75 aircraft, including eight additional Boeing 777-300s. EgyptAir now carries 6.5 million passengers and generates around 5.5 billion Egyptian pounds ($1 billion) of revenues annually. Its revenues have more than doubled and its bottom line has steadily improved since 2002-03, when it restructured creating a new holding company with nine subsidiaries, including the carrier and regional unit EgyptAir Express. The government-owned carrier is now profitable and is looking to sell sizeable stake.
"The government [has] appointed a consultant to make a market assessment on offering about a 20% stake in the company," Hamid says. "It will happen within one year from now, or maybe less."
EgyptAir aims to formally join Star in six to eight months, twice as fast as the 12-18 months it takes most new members to complete the membership process.
Star members will co-locate at Cairo's new Terminal 3 from next year