Amirah Ibrahim looks into the launch of a new airline by EgyptAir for domestic flights The national carrier announced this week the creation of a new airline company within its group, in an attempt to help the existing airline operate domestic flights. After four years of studies, the national carrier EgyptAir finally decided to separate its domestic operation from its international flights. EgyptAir Express was created to focus on domestic trips, which account for 20 per cent of all EgyptAir flights. EgyptAir will only fly to international destinations. "The new company will be the ninth 'sister' in the group," stated Atef Abdel-Hamid, chairman of EgyptAir Group. "The company will operate six new jets that will join the fleet by April, 2007." Early this month, EgyptAir Express signed a $170 million contract with Brazilian manufacturer Embraer to purchase six ERJ 170s, with options for another six aircraft of the same type. "Technically, the ERJ 170 is the right aircraft of our new subsidiary, EgyptAir Express," commented Abdel-Hamid. "It responds perfectly to the new concept we are implementing in our growing market." The newly introduced aircraft is mainly intended to serve primary and secondary destinations, and integrate them within the Egyptian domestic and regional market. "Delivery of aircraft will begin in April and continue for four months," explained Mohamed Hassan, EgyptAir Express chairman. "We believe the new fleet would provide an efficient service for both the regional and domestic market." Domestic and regional passengers will be particularly pleased to hear that prices will go down by 25 per cent, according to Hassan, which conforms with EgyptAir Express's policy of good quality service at a reasonable price. Hassan continued that the deal will be financed through loans extended to the Holding Company, and the new carrier would rely on other EgyptAir companies for needed services. "As a member of the EgyptAir family, we would cooperate with sister companies to provide ground services in destinations we fly to," explained the new chairman. "The same applies to flight services, technical support and maintenance. We will also use the reservation system of the sister airline." Nonetheless, EgyptAir Express will be hiring a new administration team of 20, in addition to new pilots, flying crews and engineers. The routes and destinations of EgyptAir Express have yet to be decided, but Hassan said his company is currently working on three main issues. These include selecting qualified human resources, setting up offices in Egypt and the region, and preparing marketing plans for different markets. EgyptAir has been looking into the idea of operating a fleet of small aircraft for domestic routes for three years. Two key manufacturers in this category, the Canadian Bombardier Company and the Brazilian Embraer Company, were considered. Six small jets were hired from each company to operate for a season on domestic flights; the result was more than LE30 million in losses due to high rental rates and high operational costs of these particular type of planes. "EgyptAir's rigorous technical evaluation in selecting the ERJ 170 makes the choice even more satisfying for us," announced Frederico Fleury Curado, Embraer Executive Vice-President, at a news conference in Cairo after signing the contract. "That is an important validation of our strategy of providing airlines with flexibility to match demand, and allow rapid adaptation to a market that constantly evolves." Curado explained that the selected aircraft is already flying in the Middle East and has been approved by a number of international airlines. The Saudi Arabian airline, for example, is already flying 10 of this type out of 15 aircraft it has ordered. It is not yet clear whether separating domestic flights from international routes will have a positive impact on the national carrier. EgyptAir had always complained about the strain of both domestic and international routes on its limited fleet, which compelled it to cancel 14 international routes. But it seems that the airline's management has not decided how best to take advantage of its lighter burden. "It is unclear whether EgyptAir would launch new services or even reopen any of the cancelled routes," noted its chairman Abdel-Hamid. EgyptAir's fleet has been expanded by 12 new Airbus jets, bringing the number to 49 aircraft. At the same time, the airline ordered six new Boeing 737-800, the first of which was delivered early this month.
