EgyptAir chief readies carrier for growth amid airport investment and tourism ambitions

These are busy times for EgyptAir group chief executive Capt Ahmed Adel.

A few months into his second stint in the role – Adel having previously occupied the position between June 2018 and March 2020, after joining the business in 1988 as a pilot – he is now leading a state-owned airline group tasked with providing the connectivity that will underpin big tourism ambitions in its home country.

“It’s exciting to see the traffic coming in and out of Cairo, seeing tourism growing exponentially in Egypt,” he tells Airline Business during an interview at November’s World Travel Market event in London.

“It’s exciting to see the plans of the Egyptian government for tourism and for development at the airports.”

Earlier this year, Egypt’s government announced an ambition to double the North African country’s overseas visitors from 15 million in 2024 to 30 million by 2030. The recent high-profile opening of the Grand Egyptian Museum is expected to aid that mission. 

It also outlined plans to upgrade Egypt’s aviation infrastructure, including through the building of a new Terminal 4 at EgyptAir’s primary hub, Cairo International airport, which would effectively double capacity at the facility to 60 million passengers per year.

So how is EgyptAir planning to make the most of this positive backdrop?

STEPPING UP

“We have a long-term plan because the government has committed to a big project when it comes to Cairo airport,” Adel says. “And EgyptAir has to rise to the occasion, from renovating the fleet to enhancing the customer service while maintaining our high level of safety. So this will be the challenge in the coming years.”

That challenge will be tackled while EgyptAir seeks to grow both point-to-point and connecting traffic.

”The main driver is all the traffic coming into Egypt,” Adel says of growth projections. But he notes that the new “state-of-the-art” terminal in Cairo will also be a boon for the carrier’s hub functions, as it seeks to better leverage the geographic advantage of having so many large travel markets within the reach of its jets.

“This will increase our hub-and-spoke operation as well,” he states. “We want the dynamic to change with the Cairo hub to have more connecting traffic.”

In that context, the airline’s ambition is to reach 97 to 100 aircraft “within the next five years” to coincide with the opening of the new terminal, Adel states, with most jets featuring an updated cabin product. It has just shy of 70 aircraft in its fleet today.

Among the incoming aircraft are the carrier’s first Boeing 737 Max 8s, which are due to begin arriving – one year late – in 2026. It has 18 Max 8s on order and is also upgrading the cabins of its 19 737-800s.

The Max jets are for “growth purely”, Adel says of what is a significant fleet expansion. In a mixed narrowbody fleet, EgyptAir also operates seven each of the Airbus A320neo and A321neo.

It is also imminently set to receive its first Airbus A350-900 widebody from an orderbook of 16 that was boosted by six aircraft through a commitment at this year’s Paris air show.

Those 16 widebodies will be used for growth and partly to replace five Boeing 777-300ERs in EgyptAir’s fleet – the leases for which have been extended through 2027, Adel states.

Alongside the A350-900s, two existing A330-200s will receive cabin upgrades, Adel says, while EgyptAir will continue operating eight Boeing 787-9s.

“Having the [A]350 working in tandem with the 787-9 – they are both state-of-the-art aircraft,” he states.

The new-generation aircraft with upgraded cabins create network opportunities.

“When you have a better product that’s good for the environment with better economics, some routes that you were looking into opening may have not been viable economically previously,” Adel explains.

“One of the examples that we can talk about now with the [A]350-900 is LAX [Los Angeles International airport],” he continues. “With an older-regeneration aircraft, the cost of operation is much higher.

“When you get a new aircraft that’s 45 tonnes lighter, that has fewer emissions, lower fuel burn, it becomes [much more viable as a destination].”

EgyptAir’s recent route filings with US authorities include Chicago alongside Los Angeles, and the carrier plans to begin flights to both in 2026. It already serves New York JFK and Newark, and also operates to Washington DC.

Beyond the USA, with so much of the world within reach of Cairo, EgyptAir has plenty of other options for deployment of its incoming widebodies.

In common with his peers, Adel acknowledges that supply-chain challenges have weighed on deliveries and aircraft availability, but he says there is some encouraging news on that topic.

“I was just in the AACO meetings in Rabat and we had some discussion with our partners in Boeing and Airbus and all our aircraft, fingers crossed, are going to come on time,” he says. Adel undertook another set of meetings with airframers, engine-makers and leasing firms during the more-recent Dubai air show. 

RESTRUCTURING PLAN

With fleet plans in place, Adel is also looking to kick-start a business-restructuring plan that stalled when Covid-19 hit.

“We have issued an RFP and we are talking to some of the top consultancy firms in the world,” he says. 

Although there have been reports of a better financial performance from the group in recent years, Adel explains the restructuring plan will be “wide ranging”, with a focus on efficiencies – “reducing your unit costs because it affects the bottom line” – while also looking at customer service, all with an eye on non-negotiable considerations such as safety and sustainability.

“Soon we will have things to announce,” he says of the restructuring effort.

Regarding sustainability, Adel says EgyptAir is committed to lowering its environmental impact, but not at any cost.

“We are excited about lowering our carbon emissions, but we need to do it seamlessly and not… coming out of the pocket of the airline, which will eventually come out of the pockets of our customers,” he states.

The future strategy will also feature an effort to forge a closer relationship between Egyptair and low-cost carrier Air Cairo, in which the group holds a 60% stake.

“We are now looking into having some sort of network planning for common networks that complement each other,” Adel says. “They work on the low-cost side of the spectrum and we work on the legacy airline.”

EgyptAir’s Star Alliance membership is also important, he says, as are the “great codeshares” the carrier has. “We are expanding on that,” he says of the latter, adding: “This helps when it comes to reaching markets that you cannot operate to in the present moment.”

EgyptAir Cargo is also a “very important business” to the group, he states. It is awaiting two more converted A330-200s to join the three already in its freighter fleet, with delivery likely in the next half year. It also operates a single converted 737-800 freighter.

“Coming from the Far East going into Africa, going into North America, into Europe, we have a lot of activities,” Adel says of cargo markets. “And also coming out of the Egyptian market to the world.”

ADAPTABLE BUSINESS

As Adel looks to tap opportunities in the passenger and cargo markets, he is optimistic about what lies ahead for EgyptAir – not least because the pandemic experience has had a profound affect on the airline sector, in his view.

“All the operators in the airline business learned about how resilient the business is, how it can adapt to anything,” he states.

Adel also points to EgyptAir’s age as a strength.

“We have been established since 1932, so we are an old airline, but not old at heart – we are very experienced. We know that we can deal with the challenges.”

Buoyed by that confidence, EgyptAir is seeking to “rise to the occasion” of the government’s investments in infrastructure and tourism, while serving the strong demand for passenger travel that has so far defined the post-Covid era.

“Travellers all over the globe and at every other airline… are insatiable when it comes to travel,” Adel states.

“This is very reassuring for our business.”