EgyptAir says no hike in fares after resumption of flights, seeks EGP 3bln loan from local banks

Menna Alaa El-Din , Tuesday 16 Jun 2020

EgyptAir CEO predicts occupancy rates at 20-30 percent upon the resumption of regular air traffic if no surge in infections is reported

EgyptAir (Photo: Al-Ahram)
EgyptAir (Photo: Al-Ahram)

EgyptAir will not hike ticket prices in the current period or after the coronavirus crisis ends, the chairman of the national carrier said on Tuesday.

Speaking at a press conference, Roshdy Zakaria said there would be no surge in fares, adding that such increases would have been implemented if social distancing rules were applied, which the International Air Transport Association (IATA) has opposed.

He said recent reduction packages to boost inbound tourism upon the resumption of flights in July would allow for higher passenger turnout, helping to lower prices.

He predicted occupancy rates at 20-30 percent upon the resumption of regular air traffic, if no surge in infections is reported, with occupancy rates edging up gradually to 50 percent by the end of 2020.

The national airline is mainly operating flights to repatriate Egyptians abroad and has returned around 57,000 nationals since the outbreak.

Limited flights have been operated to a few international destinations this month.

That week, Egypt said it will introduce a number of incentives to encourage inbound tourism upon the gradual resumption of international flights.

It will offer a 50 percent discount on landing and parking fees and a 20 percent discount on ground services in South Sinai, Hurghada and Matrouh airports, according to an official statement.

Zakaria said some trips would be combined in case of no demand, depending on booking rates, but it was too early to determine if such a move would be implemented.

The airline has opened booking for all European destinations it normally flies to, as well as the US, the Middle East, the Gulf, China and, in Africa, Sudan only, he said.

Egypt will gradual resume regular international flights at all its airports starting from July 1, with exemptions for foreign tourists, who will only be allowed into three coastal governorates as part of tour groups, to help offset the vital sector’s losses amid the pandemic.

It also announced a number of measures, including requiring travellers from countries with high rates of coronavirus infections to submit PCR test results before traveling to prove they are coronavirus-free, amid other health protocols on board.

New loan

The air travel sector’s losses, which amount to billions of Egyptian pounds, have pushed private and national airlines to seek government aid.

Zakaria said EgyptAir has started talks with the National Bank of Egypt and Banque du Caire on a EGP 3 billion loan, with the deal set to be finalised next month.

The loan aims to help the carriers repay external loans in the coming months amid a stall in revenues due to the crisis, Zakaria said, estimating losses by the company at EGP 3 billion since the outbreak began.

Leasing of the airline’s fleet has been delayed for three to six months until the end of the crisis, he said.

Egypt said in May it would provide EGP 2 billion to EgyptAir to deal with the pandemic's repercussions.

In addition, the executive chairman of Egyptian Holding Company for Airport and Air Navigation (EHCAA), Mohamed Said Mahrous, said the losses suffered by its subsidiaries due to the suspension of air traffic for the past three months amount to EGP 696 million.

Egypt hopes that the resumption of regular flights starting next month will boost its ailing tourism sector, an essential source of foreign currency.

The government has so far allowed over 200 hotels nationwide to reopen at reduced occupancy rates and while adhering to new safety protocols, as part of efforts to revive the sector.

The permitted occupancy was initially set at 25 percent of usual capacity, but was increased to 50 percent earlier this month.

* 1 USD  = 16.12 EGP according to the exchange rate of the Central Bank of Egypt on Tuesday

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