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Egypt addresses airline concerns on profit repatriation

Reuters , Thursday 3 Mar 2016
British Airways
British Airways aircraft at London's Heathrow Airport on (AFP)
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Egypt has addressed the concerns of airlines who have complained in recent weeks about their inability to repatriate earnings, a central bank source said on Wednesday.

"Air carriers' concerns have been addressed and the latest issue with British Airways has been totally resolved regarding the repatriation of their profits," the source told Reuters.

Import-dependent Egypt has faced a worsening dollar shortage since a 2011 uprising and subsequent turmoil drove away foreign investors and tourists, key sources of foreign currency.

The crash of a Russian airliner over Egypt's Sinai peninsula in late October, killing all 224 people aboard, has further hit tourism in the Red Sea, and with it Egypt's dollar earnings.

Last week, Air France-KLM told Reuters it had been unable to repatriate any earnings since October and was owed more than 100 million Egyptian pounds ($12.77 million).

Local media have reported that British Airways was suffering a similar problem. There was no official comment from BA.

The Egyptian pound has come under downward pressure as reserves have tumbled, but the central bank is reluctant to devalue for fear of further fuelling double-digit inflation.

Instead, it has sought to preserve forex reserves for food, fuel, medicines and manufacturing components, by rationing dollars to non-essential goods and services.

But the restrictions have hampered manufacturing and trade and made it harder for foreign investors to repatriate revenues.

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