Exports hindered by fees, long backups at Cairo International
CAIRO: A new Ministry of Foreign Trade and Industry (MFTI) study blames restrictions placed on foreign cargo carriers at Cairo International Airport (CIA) for causing the backup of thousands of tons of cargo annually and posing an obstacle to local exports.
Of the country s 22 airports, only CIA has been fitted to handle cargo. The airport is also the sole facility prevented from entering the international Open Skies Agreement by the Ministry of Civil Aviation, a policy that has long protected the national carrier, EgyptAir. Foreign cargo carriers transporting goods in and out of the country are now charged up to $15,000 in royalty fees to EgyptAir per 40-ton aircraft.
Among other recommendations, MFTI s report recommends the removal of all restrictions placed on foreign cargo carriers that lead to the backup of cargo, which discourages investors, due to the lack of storage space at the airport and increasing export costs.
Egypt signed on to Open Skies in 2000, agreeing to liberalize its air transportation sector to allow foreign passenger and cargo carriers to fly to EgyptAir destinations and compete freely with the national airline.
EgyptAir now operates just five cargo aircraft, ranging in capacity from 40 to 45 tons each. According to Information and Decision Support Center figures, CIA handled more than 25 million tons of cargo, more than twice the figure recorded in 2002.
MFTI officials were not available to comment as of press time because of Eid celebrations. Although the report is non-binding, analysts expect it will have an impact on accelerating the liberalization of cargo shipping, if only out of interest in boosting exports.
Among its sharpest criticisms, the report called on the concerned authorities to allow foreign cargo carriers to provide their own x-ray machines at airports besides CIA in order to develop the capacities of those facilities to handle cargo. The government has long justified limiting cargo handling to CIA because of the lack of x-ray machines at other airports.
The report also stresses the need to liberalize ground and maintenance services at all airports. Currently only EgyptAir subsidiaries are allowed to operate on local and foreign airlines, which has given them the opportunity to hike service prices and contributed to the decisions of some airlines not to fly to Egyptian airports.
Despite the government s plan to bring Open Skies to CIA by the end of the decade to allow the airport to develop into a regional hub, Minister of Civil Aviation Ahmed Shafiq maintains the decision will be made only when EgyptAir is assured that it won’t lose any business. This, he says, can only be accomplished in the event of increased passenger and cargo traffic.
Adla Ragab, Cairo University economics professor, says liberalizing the sector is as imperative as it is imminent, but needs to be implemented gradually. She says as reforms are introduced, such as lifting restrictions off of charter airlines carrying Egyptian exports, the national carrier s relatively small fleet needs to be continually increased and modernized or face the reality of competition for the first time since its establishment as the first airline in Africa and the Middle East in 1930.
