CAIRO: Feel like stopping by the Gulf this weekend? For around $40,000 not only can you make the weekend trip, but do it in your own private jet.
According to Captain Magdy of Travco Group – one of the largest tourism companies in Egypt – around two to three flights depart weekly between the Gulf and Cairo during the summer months.
The market has shown roughly a 20 percent increase over the past couple of years, and some leaders in the aviation industry expect that increase to continue. Most of this increase is due to executives and business people using private jets to save time and to provide necessary flexibility in traveling, according to Amani El-Turgoman, director of operations for Travco group. She herself has used a private jet to reach meetings that last for one or two hours.
But private jets are no longer just the domain of the super-wealthy. The nature of air travel has been changing in Egypt, reflecting a larger trend across the region and around the world.
EgyptAir has spread its wings and embraced liberalization of the country’s air transport by opening up its skies to competition.
“Egypt’s aviation policies have changed considerably, and monopoly is no longer acceptable, said Mohammed Hassan, chairman of EgyptAir Express. “There’s no such thing called protection of EgyptAir vis-à-vis competitors. Two years ago, the Ministry of Civil Aviation permitted a large number of private airline companies to fly across the Egyptian skies.
Talks of liberalizing Egypt’s civil aviation sector under the international Open Skies Agreement began in 2000. This step would allow local, regional and international airline carriers to fly to EgyptAir destinations and compete freely with the airline. This would put an end to the national airline carrier favoritism. Analysts, however, voiced their skepticism about when the initiative would be implemented.
Seven years later, little progress has been made towards implementing the agreement. This is especially true at Cairo International Airport, which, as opposed to other airports across the country, has recently granted vast freedom to local and international carriers and charter companies.
Minister of Civil Aviation Ahmed Shafiq was quoted by the local press as saying that the country was currently not ready to open all its airports to all airlines. In direct reference to the Cairo International Airport, Shafiq said implementing a complete Open Skies policy has to wait until construction of the new third terminal is complete in 2007. The minister maintained the decision would be made only in the event of increased passenger traffic, ensuring that EgyptAir would not lose any business.
“Allowing private airlines to fly domestic routes encompasses a number of phases, Hassan explained. “It begins with liberalization of irregular flights, which private carriers flying in Egypt are now allowed to do. And then comes the issue of liberalization of regularly scheduled flights.
Private airline companies believe that the market in Egypt is relatively new but has a lot of potential to grow after full implementation of the Open Skies agreement.
“Competition is healthy. A lot of companies are now starting to venture into this sort of business, which is a good indication of better quality services, said Tarek Amer, chairman of SunAir, a privately-owned airline company that started operation in April 2006. “However, liberalizing the sector needs to be implemented gradually and within supervision.
He pointed out that if market forces were left to govern the sector, giant international companies would take full control of operations and newly established private ones would vanish.
“I cannot compete with AirFrance, for example. As an Egyptian company, the government should grant me some privileges that will ensure sustainability of my business in face of international competition, Amer added. “Some private carriers have enough financial capability that can help it offer seats at cheaper prices and attract more passengers. Who can compete with, say an Emirati company that offers seats at some 100 dirhams? That is how several domestic companies could not sustain their businesses and ceased to exist.
He suggested that the ministry should define a minimum price that companies cannot sell below. “Open Skies is imperative and the country has to implement it. But still it has to happen with some protection given to smaller airline carriers.
Tourism companies also see that a private air travel industry is vital in boosting their businesses. “We’ve long been calling for such liberalization to occur. When more companies enter the market, competition increases which immediately implies that prices decrease, all to the benefit of consumers, explained Ahmed Abdel Rahman, chairman of the Egyptian Businessmen Association for Tourism. “The market in Egypt now necessitates EgyptAir to break its monopoly and allow private companies to fly domestic routes, which will in turn attract more tourists to visit Egypt.
Apparently, investors are interested in Egypt’s expanding private air travel market. Yet the market is still small, explained Amr Sedky, vice chairman of Chambers of Tourism Companies and Agencies, and private jets have newly been introduced into Egypt with most of them still owned by wealthy individuals.
Egypt is not alone in the increase of private jets. A new private jet company called Prestige Jet, which opened in Dubai last May, cited the increasing globalization of business in explaining the increased need for faster as well as more flexible and reliable travel for business leaders.
Yet questions remain regarding to what extent private airline companies and private jets – being so new – are just a novelty luxury item and actually hold less long-term growth potential then many anticipate.
Hassan, of EgyptAir Express, sees little potential for the business of private air travel in Egypt. “To operate regularly scheduled flights across Egypt is very hefty and economically unfeasible, he said. “Prices of tickets will be very expensive, beyond passengers’ expectations. For example, a cost of a Cairo-Sharm El-Sheikh flight will be equivalent to a Cairo-Beirut flight.
Still, the ministry is currently looking into signing the Open Skies agreement with countries including England, France, Germany, Russia, Italy, Saudi Arabia, and others.
