Egypt's national carrier is being converted into a holding company and its long-serving chairman, Fahim Rayan, has been replaced. Amira Ibrahim reports Click to view caption The announcement, on Monday, that long- standing EgyptAir Chairman Fahim Rayan was stepping down from the post he has held for 20 years, certainly came as a surprise. Word on the street had consistently been that nothing could change EgyptAir, or its internal power structure. Ahmed Shafiq, the recently appointed civil aviation minister, has so far refused to disclose whether Rayan resigned or was fired. The EgyptAir chief had come under fire after one of the company's Boeing 737s crashed in Tunis last month, killing 14 people. But the airline's woes go much deeper than that. Amongst other things, EgyptAir's image had been severely tarnished by the 1999 crash of a Boeing 767 off the US coast, in which 217 passengers and crew had perished. Shafiq announced that Abdel-Fattah Kato, head of the Holding Company for Civil Aviation, will become the acting chairman of the new EgyptAir Holding Company beginning 1 July. The fact that EgyptAir is becoming a holding company is in itself symbolic of the potentially groundbreaking changes currently going on at the national carrier. Two weeks ago the cabinet approved a draft law which will turn EgyptAir into six affiliated companies, breaking up the portfolios once overseen by just one company into separate entities for airlines, air services, ground services, maintenance, air cargo, tourism and duty free shops. Shafiq has already named five new heads for the affiliated companies, and the head of the tourism and duty free shops company is due to be named within 48 hours. Shafiq has denied that Rayan resigned in protest over the move to change EgyptAir into a holding company. He had even released information suggesting that Rayan would be picked to head the new company. Informed sources, however, told Al-Ahram Weekly that Rayan, known for his staunch anti- privatisation leanings, was unofficially advised not to accept the new post. According to the aviation minister, a group of consultants and experts are currently busily studying transfer procedures, and evaluating the company's assets and properties, in order to specify how its shares will be divided between each of the affiliated companies. Shafiq said that the new management would have full authorisation to run the companies, adding only that he "will intervene, as head of the general assembly, if any decision taken does not conform to development plans". Shafiq, a trusted aide to President Hosni Mubarak, quickly got the green light from the president to make the changes. Three weeks ago, the minister brought the company under his direct supervision and put a unified control centre into place with a mandate to control all aviation movement. He ordered a review of all long-distance routes and decided to suspend the loss- making Sydney service by 31 July 2002. This route closure has raised a public debate as 120,000 Egyptian immigrants in Australia will henceforth have no direct transportation link with their homeland. The route was averaging a load-factor of only 65 per cent and losses in 2000 amounted to a staggering LE54 million. EgyptAir's commercial sector head, Mahmoud Hamed, has assured the public that the airline will fulfill its commitments to passengers already holding tickets by flying them on alternative carriers at no extra cost. Shafiq has also revealed that he is considering closing 10 other long-distance routes. At the same time, EgyptAir will also be opening a new route between Cairo and the Chinese capital, Beijing. Shafiq believes it could bring about an increase in trade between the two countries. He stressed that the new route would be operated on a trial basis. "The new Beijing service will be carefully monitored. If its losses approach even a quarter of the Sydney route, I won't hesitate to shut it down," he said. The minister has also suspended a pilot and a co-pilot from their flight schedules for violating safety instructions in two separate incidents, and ordered a suspension of all pilot promotions pending the evaluation of their training programmes. Shafiq dismissed a suggestion that amongst the plans for revamping the company was a drive to encourage Egyptian businessmen to invest in the national carrier. "EgyptAir is a strategic entity on the same footing as the Suez Canal and other industries related directly to Egypt's national security. There is no intention to privatise the company," he told reporters. "EgyptAir will remain 'untouchable' in that respect." But, he added, businessmen could become partners with EgyptAir, such as is the case with Shorouq Airlines (a 50/50 venture between EgyptAir and Kuwait Airways), hotels and other similar projects. Will the changes bring forth a new era for EgyptAir? Only time will tell.
