Safwat Musallam, Chairman, Egypt Air: Interview

Interview: Safwat Musallam

How do Egypt’s airport facilities compare with those of neighbouring countries?

SAFWAT MUSALLAM: There are 26 airports in the country, with two upcoming ones: Sphinx International Airport and Katameya International Airport. Cairo’s airport compares very positively to most African airports. Most GCC countries’ airports are very new and they had enough resources to build adequate facilities.

From a technological point of view, the country has very high quality standards. Based purely on size, none of our airports are very large as they are spread around different areas of the country rather than centrally located. Nevertheless, all our airports contain cafes, restaurants and duty-free shops, as well as comfortable waiting areas. Furthermore, maintenance, repair and overhaul services are in good condition. All of the above position Egypt’s airport facilities very well within the African context.

How can Egypt assert its position as a competitive player among other African airlines?

MUSALLAM: Thanks to its strategic location, Egypt has the chance to play a big role in the industry, however, we need to increase the frequency of flights rather than expand the number of destinations. This is the only way to compete with other airlines regularly serving Africa. Offering more flights to the same location is also fundamental to cutting down costs. To mitigate long flight durations, we could also offer Egypt as a stopover for flights to other destinations.

What are the biggest challenges and opportunities that the aviation industry is facing?

MUSALLAM: Cairo has 15m to 16m visitors every year and a population of about 35m. Things used to be much easier. Competition is growing, especially due to low-cost carriers, which are challenging the current air market. Our greatest challenge and objective is to increase air carriage to Egypt. Overcapacity is a major problem globally and this is causing prices to drop. In other words, everyone is trying to reduce costs in order to maintain a favourable balance.

Consumer behaviour has also changed. Before, they were looking first and foremost at the quality of service; now, customers are only after the best deal in terms of price. However, the lower the price, the lower the service: it is challenging to keep up high standards while trying to be profitable.

What measures are being taken to help attract private sector participation?

MUSALLAM: Currently, the private sector in Egypt is still underdeveloped. Private companies are operating only in profit areas, though it is important to expand their portfolio beyond Egypt to more destinations.

The private sector is also very fragmented and it is in great need of consolidation. You have some companies that are so small they only have two aircraft, and this in turn reduces efficiency.

The Ministry of Civil Aviation is working to change capital requirements for private companies and this will positively affect the private sector. The flotation of the pound is also giving the cargo industry a chance to connect Egypt’s manufacturing sector to its overall economy, as well as with foreign countries.

What further action is needed to present Egypt as a more attractive destination?

MUSALLAM: Egypt is one of the countries with the most open skies. All the airports are open except for Cairo, and that’s because of capacity restrictions. Furthermore, our foreign ownership restrictions are quite low and this is very attractive for any foreign investor. Having said that, it is important to upgrade the existing fleet and keep up with the competition. This will help reduce costs in the medium to long term, while at the same time increasing flight range, making costs more attractive and providing new destinations.