EgyptAir

EgyptAir grows its hub role, expanding 60% in Africa as European tourism slowly recovers

EgyptAir is pursuing rapid expansion in Africa as it looks to drive further increases in transit traffic, which has helped the carrier recover from the crisis of early 2011. The Star Alliance carrier expects to post a break-even result for the fiscal year ending 30-Jun-2013 (FY2013) and be back in the black in FY2014, featuring a vastly different and more balanced network than it had prior to the Jan-2011 revolution.

Over the last two years EgyptAir has more than doubled its international capacity within Africa, albeit from a modest base. The increased focus on Africa will continue in 2H2013 as four more destinations are added.

Africa and a bigger operation in the nearby Middle East has helped EgyptAir reduce its reliance on Europe in the aftermath of the crisis, which led to a significant drop in inbound tourist traffic. The larger regional network also has supported a significant increase in transit traffic, from only 3% prior to the crisis to about 17% currently. The increase in transit traffic along with more local traffic within the Middle East/Africa region, where demand has been rising rapidly, significantly improves EgyptAir’s outlook.

EgyptAir looks to expand its way out of intensive care in 2013

EgyptAir continues to make massive losses as the carrier and Egypt struggle to recover from the Jan-2011 revolution which resulted in the airline moving into crisis mode for two months when it was forced to temporarily ground up to 40% of its fleet and as 80% of revenue evaporated.

Egypt’s Minister of Civil Aviation Wael al-Maddawy reportedly told the Shura Council Transportation Committee in Mar-2013 that losses at the national carrier had reached more than EGP6 billion (USD885 million) since the revolution. EgyptAir is yet to publicly release its annual report for FY2012 which ended 30-Jun-2012, but Mr Maddawy said EGP650 million (USD95.7 million) of the losses were due to the weakening of the EGP to the USD.

“EgyptAir’s losses are huge, but not catastrophic, [as they won’t] lead to the closure or selling of the company,” Mr Maddawy said. The carrier is burdened with 32,000 employees, when it needs just 12,000 to operate the carrier.  Some 20,000 more employees than it needs. However, the carrier is prevented from reducing its headcount due to the prevailing social circumstances, according to Mr Maddawy.

Libya’s economy recovers as airlines restore networks post-revolution

Libya has mounted a strong economic recovery, enticing international carriers to rapidly rebuild their capacity, withdrawn after a bloody revolution engulfed the northern African state in Feb-2011.

The country’s two state-owned airlines, Libyan Air and Afriqiyah Airlines, which both suffered extensive damage to aircraft, resumed operations late 2011 and are gradually reestablishing their pre-war networks as aircraft return to service.

Their initial focus has been on linking key economic and political partners around the Mediterranean, including Turkey, and to the Middle East as well as Britain.

A merger of the two carriers is also progressing slowly though earlier expectations of a union in the first half of 2013 appear to have been put back to at least early 2014.

Meanwhile Turkish Airlines, Tunisair and EgyptAir lead the foreign airline capacity levels reintroduced.

West Africa movers and shakers: Air Nigeria shuts down; EgyptAir and South African look to expand

The once-sleepy market in west Africa continues to prove dynamic, even if occurrences are two steps forward and one step backwards. In the category of the latter, once promising Air Nigeria has suspended operations after a high profile few months that included staff strikes, rumours and two groundings by the regulator. Political interference was thrown into the mix, with a police raid over taxes unpaid from a previous owner. The airline leaves a gap in the high demand Lagos-London market as well as domestic and regional routes.

The situation is more stable in Ghana, whose smaller market but stronger regulations have attracted new carriers. And more may be on their way: South African Airways wants to establish a regional hub in Accra as well as export its lower-cost units in a bid to have a pan-African network. EgyptAir has proposed investing in a small Ghanian carrier to further its reach, a growing sign that Africa will see robust competition rather than the obscure and surprise announcement in 2010 from EgyptAir, Ethiopian Airlines and SAA to seek broad cooperation with each other.

Rebuilding Libya's aviation industry crucial to economic recovery

Even before the NATO air strikes, the United Nations sanctions and the European Union ban, Libya’s aviation industry had little hope. The country, ruled by Muammar Gaddafi under an iron fist for the last 40 years, placed little focus on its airlines and airports, while countries in the nearby Middle East flourished and started to develop some of the largest hubs in the world. The Middle East/North African region has become increasingly important but it seems Libya was left behind, and when major unrest broke out in Feb-2011, the industry’s problems widened significantly. Now Libya has been “liberalised” and Gaddafi killed, it must begin the slow process of rebuilding an industry whose foundations were not strong to begin with. International airlines have resumed services, investment firms are showing interest in relaunching airport renovation projects, the country’s two national carriers have relaunched operations and are set to resume talks on their merger, and tourism operators are becoming optimistic about future bookings.

Inspired by the Tunisian and Egyptian revolutions, the unrest in Libya is part of the greater Arab Spring, which has seen the leaders of Egypt, Tunisia and now Libya overthrown. Aviation in these countries during the unrest was unstable, however, Tunisair and EgyptAir have successfully restored operations to full capacity. In Feb-2011, Cairo International Airport recorded 530,000 passengers – a 54% drop from Feb-2010. The airport is now operating at near-2010 capacity, and in Jul-2011 and Sep-2011, passenger traffic surpassed 2009 levels. Libya’s Monastir Habib Bourguiba International Airport and Enfidha Zine El Abidine Ben Ali Airport, both operated by TAV Holdings, have been recording consistent traffic decreases of between 30% and 50% each month.

United Airlines eager to tap expected growth in US-Africa market

United Airlines aims to further expand its network in Africa, the fast-growing market it only began serving last year and last month tripled its capacity in with the launch of Houston-Lagos service. But the rate of expansion will likely be relatively slow, reflecting some of the growing pains in Africa experienced by rival Delta Air Lines.

The opportunities in Africa for US carriers are huge given the current small number of flights in the market and the increasing economic ties between the US and several African countries. US-Africa has always been a modestly sized market that has traditionally been served primarily with connections via Europe. Slowly more direct services are opening up and over the next several years new flights are expected to be launched by US and African carriers.

Africa finally became the sixth and final continent to be added to United’s network in Jun-2010, when the carrier launched daily Boeing 767 service on the Washington Dulles-Accra route.