New taxes imposed on foreign travel have shocked passengers while airlines working in Egypt are unsure about the application of the new legislation, reports Amira Ibrahim Legislation approved by the Egyptian parliament two weeks ago increasing taxes on foreign travel has sent shock waves through the aviation industry. The price of flight tickets was already increased by 15 per cent only two months ago, and now this additional charge is being levied even before companies have come to terms with the implementation of the first increase. In the absence of clear guidelines on the practical introduction of the price increase, airlines say they are unable to estimate the consequences of the new legislation. Airline employees, both domestic and foreign, are unable to provide clear answers to customer enquiries regarding the size of the increases or whether the legislation applies to tickets booked prior to the introduction of the legislation. "All we know about the 25 per cent increase is what was published in the Egyptian newspapers," said Mohamed Mattar, marketing manager of Kuwaiti Airlines Cairo branch. "We have not received any official notification from the Finance Ministry, nor the Aviation Ministry over regulations regarding the application of the new fees or any specification with regard to the size of the increase," he explained. Most other foreign airlines say the same. "We cannot give any explanations to our clients. We received many inquiries from travel agents as well but we were unable to reply," stated an Air France employee. According to this employee, many travel agencies rushed to make advance bookings to avoid having to pay the extra fees, which will supposedly be effective from 1 July. Others say the new legislation will not come into effect until October. Businesses are worried about previous bookings made within the framework of standing contracts between airlines and travel agents. "These agents had finalised their contracts with agencies abroad according to certain flight prices. Now they're worried they may lose their contracts," stated an owner of an Egyptian charter airline, speaking on condition of anonymity. "They are now turning to us for help. We have received demands from many agents to lower basic prices for a certain period," he concluded. Sources at the Ministry of Aviation told Al-Ahram Weekly that a meeting would be held soon with airline management teams to discuss alternatives to help travel operators honour their commitments. But many travel agents believe the government should actively provide the solution. "The government should face up to their responsibilities and grant a period of grace to allow airlines to re-organise their business abroad," stated an airline agent. The government has also approved legislation to increase departure fees from LE5 to LE50, which will be also collected by airlines and added to ticket prices. "Very few passengers are aware of the fact that ticket prices include fees and taxes. Most people only look at the end price, which means we are blamed for collecting additional charges which we don't actually benefit from," Mattar added. The only airline that seemed relaxed about the increase was the national carrier, EgyptAir. "Taxes is one of the ways for countries to manage their budgets and finance certain projects," said Mohamed Mounir, EgyptAir's commercial manger. Mounir said the carrier started to levy the new taxes and fees on Sunday, while the new departure fees will be charged from 1 October. The tax bracket has been increased from LE150 to LE300 for first class tickets and from LE100 to LE150 for business and economy classes. According to Mounir, EgyptAir tickets take account of a number of taxes and fees including a 25 per cent resources tax charge, or a maximum fee of LE150 for first class and LE100 for other classes. "The tax increase will help us improve our services. Everyone will benefit from the increase -- the country, the airlines and passengers as well," Mounir explained. With a dearth of information on the amount of taxes levied, airlines are not able to forecast how the new charges will affect sales and are consequently unable to draw up new marketing plans.
