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Egypt acts to lift morale and restructure at national carrier

The Egyptian government has appointed former air force general Abdel Fattah Katu chairman of EgyptAir in moves to restructure and restore morale at the airline.

Katu takes over from Mohammed Fahim Rayan, who had held the post for the past 21 years. No reason has been given for his being replaced. The new appointment will take effect on 1 July when the national carrier becomes a holding company and divides into six operational units in a move aimed at boosting profitability.

Despite the creation of a holding company, civil aviation minister Ahmed Shafiq denies that the government is preparing the carrier for privatisation, saying the airline is "as much a permanent state asset as the Suez Canal".

The changes take place against the background of Egyptian media allegations of corruption and inefficiency in the national airline. Morale has also fallen in the aftermath of two fatal crashes - a Boeing 767 in the Atlantic in October 1999 and a Boeing 737 near Tunis last month. Revenue has also fallen since 11 September because of a sharp drop in tourist traffic to the Middle East.

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