AFRAA: EgyptAir Flies Through the Storm
The political instability in North Africa has probably hurt EgyptAir as much as anybody and the events of the past couple of days will do little to renew confidence for the Star Alliance carrier. As demonstrators were this week gathering in Cairo’s Tahrir Square, the airline’s Chairman and Chief Executive Officer Hussein Massoud was addressing delegates at the African Airlines Association (AFRAA) Annual General Assembly (AGA) in Marrakech, Morocco about how the carrier overcame the disruptions earlier this year, which led to President Hosni Mubarak stepping down from power on February 11.
The ‘Egyptian Revolution’ kick-started on January 25 as the public began their uprising and soon tourists were becoming anxious, acknowledged Hussein Massoud. However, nobody would have predicted the major disruption to the airline’s operations that would take place over the subsequent three weeks as a military curfew limited its activities. Egypt may only account for 0.8 per cent of the global aviation traffic, but there is still some 31 million seats operating to or from the country every year and this was the winter season when tourist visitors are at their highest.
A curfew that closed Cairo International Airport for most of some days meant that EgyptAir had to radically alter its flight schedule. “On some days the curfew spread to 19 hours so we only had a five hour window to get as many of flights in and out of Cairo,” explained Hussein Massoud.
The impact on the carrier is clear when you look at its loads for February 2011 with international routes down from 75 to 45 per cent and domestic services from 88 to 68 per cent. “We lost approximately EGP700 million during the crisis,” Hussein Massoud told The HUB. “Revenues during the first week of the revolution were down 80 per cent and ticket sales shrunk an estimated 60 per cent. We needed to take action as we couldn’t continue to absorb such effects.”
The airline worked quickly to address the problems and established a ‘recovery plan’ to assess costs and develop a sustainable business model. “This included a dynamic scheduling philosophy,” highlighted Hussein Massoud. Due to the curfew, the airline wasn’t even sure of each day’s operations until the evening of the proceeding day.
“We would post our schedule and detail this on television in the evening,” explained the EgyptAir Chief Executive. “We worked hard to develop a suitable schedule for each day within the time constraints the curfew set. For example we would switch flights between narrowbodied and widebodied aircraft and even offer multiple services to a single destination.”
The dynamic scheduling and curfew also brought crewing issues as many staff couldn’t travel to or from the airport. “Some members of staff worked endless hours under considerably difficult conditions to keep EgyptAir flying as best as possible. I remember a 25-year old Call Center Agent who chose to work 48 successive hours. We even arranged for many staff to bring their close families and we put them up at EgyptAir’s expense in airport hotels in order to maintain our operations,” said Hussein Massoud.
But, weeks after the revolution it became clear that the airline needed to make some major changes to its network to maintain operations and subsequently frequencies were reduced on a number of routes, poor performing flights were suspended and there was a consolidation of activity in some markets as more than a third of its fleet were grounded. Some Infrastructure projects were delayed, management allowances cuts and staff travel reduced and by July loads had returned to healthy levels.
Hussein Massoud remains cautious about the airline’s future. He believes it will be able to return to a normal operation but only after political and economic stability returns to Egypt. As for growth, well the respected airline executive, who also holds the position of Chairman of the AFRAA Executive Committee, acknowledged there is one particular market where the carrier would like to grow but has been frustratingly restricted in its plans… London.
“We really want to expand our operations to London Heathrow but we are in a position that we can’t even take advantage of the benefits of a liberalised market to develop a schedule to support travel demand,” he said. “It seems that the skies may be open, but the airport is firmly closed!”
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