Dramatically increasing the cost of domestic flights for Egyptians is not a decision EgyptAir will live down easily, writes Amirah Ibrahim A decision by EgyptAir this week to reduce the cost of domestic flights for foreigners and hike the price for Egyptians has infuriated the public. But officials believe that Egyptians should only fly if they can afford the higher prices. The decision equated ticket prices for everyone, by reducing prices for foreigners by 30 to 40 per cent and increasing them by 12 to 20 per cent for Egyptians, according to Atef Abdel-Hamid, the chairman of EgyptAir Holding Company. Already, the national carrier had progressively increased prices by almost 80 per cent over the past three years, citing fuel prices and expansion plans as reasons. The decision implemented on Sunday classified 13 price slots for economy class and two for business class. But after crunching the numbers, it appears that the percentage increase is much higher than official claims. Prices in economy class jumped between 35 and 55 per cent, while in business class have reached as much as 75 per. But Abdel-Hamid was nonchalant about the discrepancies while talking to reporters at a news conference to explain the decision on 22 February. "It does not really make any difference for businessmen and rich people; they will not complain," he said confidently. Examples of the price changes include the Cairo-Abu Simbel ticket in economy class which jumped from LE880 to LE1680; Cairo-Luxor in the same class rose from LE670 to LE1,030; and Cairo-Aswan in the same slot went from LE760 to LE1,320. The increase on the Cairo-Sharm El-Sheikh and Cairo-Hurghada routes was lower, with both routes increasing from LE670 to LE815. More restrictions were added to buying tickets in the cheaper slots, such as no refunds on cancelled tickets, a LE40 fee for changing dates, and instant payment for booked tickets. Initially, Egyptian passengers had been waiting for the newly established EgyptAir Express Airline to begin operating domestic routes and bring down ticket prices by 25 per cent, just as officials promised three months ago. But the launch of Express Airline, expected at the beginning of April with six small jets, was postponed at least until May. Instead, EgyptAir unexpectedly announced the large leap in ticket prices for Egyptians on domestic flights, justifying the move by saying it was needed to unify ticket prices and enable online booking. Three months ago, EgyptAir launched its new e-ticketing system and on 19 February began using the new IBE e-booking engine. "We had to sort the problem of having two prices for foreigners and Egyptians," stated Abdel-Hamid. "After long deliberations, we decided that we will not ask foreigners to pay the lowest prices." Foreigners represent 70 per cent of the 1.4 million passengers on domestic routes. Revenues from all domestic flights are estimated at LE593 million annually, and are expected to initially take a LE140 million dip after the price adjustment. This is a result of LE154 million in losses from reduced fares for foreigners and a rise of LE14 million after the price increase for Egyptians. "In the end, we believe that the new fares will attract more foreign passengers, thus covering the loss and help encourage tourism," argued Abdel-Hamid. Some tourism agencies, however, complained that high domestic fares have affected their business, as does EgyptAir's monopoly of domestic routes. Surprisingly, Abdel-Hamid denied an EgyptAir monopoly on the domestic market despite the fact that mostly it is the only operator of domestic routes. "Talk of a monopoly is nonsense," he interjected. "There is a number of private airlines operating on domestic routes, such as Petroleum Air Services (PAS) and the newly established Al-Wadi airline." But little information is available about the latter. To appease anger over soaring prices, the national carrier decided to offer some temporary bargains on domestic flights for Egyptians, such as a 20 per cent discount on domestic flights until EgyptAir Express begins operations with lower fares. The good news is that the IBE booking system has been more successful than expected. Instead of the anticipated 10 e- bookings in the first few days, there were 271 bookings even without any advertising of the new service. Abdel-Hamid believes that Egyptians will soon become accustomed to online booking and learn to book their vacations well ahead of time to benefit from lower prices. The chairman alleged that the higher cost slots are allocated for groups booking through foreign offices only, but since e- booking is available for everyone foreigners will also be able to benefit from the lower cost slots. "But if the Egyptians make early arrangements for their vacations they will benefit the same as foreigners," replied Abdel-Hamid.
