EgyptAir plans further restructuring as losses mount. But outlook may brighten as Egypt stabilises

EgyptAir is planning network and capacity cuts as part of a new turnaround plan aimed at returning the carrier to profitability after an extremely challenging four years. The plan, implemented by EgyptAir's new executive team, is banking on a combination of network adjustments, more transit traffic and the start of a recovery in inbound tourist numbers leading to a turnaround by early 2015.

The carrier is cutting unprofitable routes, including Jakarta, and reducing frequencies across its Asian, European and the Middle Eastern networks. But the total capacity cut will not exceed 10% as EgyptAir's new business plan envisions an improvement in demand as stability returns to Egypt in the aftermath of the recent elections.

EgyptAir has been highly unprofitable since the political crisis in Egypt began in early 2011. The carrier expects to incur another large loss in the current fiscal year ending 30-Jun-2014 as revenues, yields, load factors and passenger traffic have all dropped despite flat capacity.