By Ahmed Saad
The Egyptian Holding Company for Airports and Air Navigation (EHCAAN) saw a decline of 4.8% in aircraft movement in 2014, almost the same rate as the previous year, said the company’s chairman Ashraf Zaki.
Up to 31 million passengers used the company’s airports in 2013, marking a 6% decrease compared to 33 million passengers in 2012, Zaki told Al-Borsa in an interview.
He attributed the fall of passengers to the travel bans on Egypt that had been imposed by several tourist exporting countries in mid-August 2013.
Some 29 airports are affiliated with the company, 10 of which are international and 19 domestic.
Top affiliate international airports are the Cairo International Airport, Sharm El-Sheikh, Hurghda, Luxor, Aswan and Borg Al-Arab.
According to Zaki, EHCAAN is doing “its best” such that the Cairo International Airport is able to restore its former status as the best airport in Africa after retreating to third place in 2013, following South Africa’s Johanessburg and Cape Town, respectively.
The ranking is based on the number of passengers an airport receives in addition to its efficiency and service quality, he said.
Zaki has ruled out that maintenance operations carried out for the airway L05 at the Cairo Airport caused the retreat, noting that work is due for completion in six months’ time.
The airport authorities closed the L05 airway, near the Sindbad Fun Fair, and have subjected it to a maintenance and development scheme to upgrade its efficiency. Costs are estimated at EGP 235m. Aircraft movement has been transferred to the other two airways of the airport.
Meanwhile, Zaki said that the Holding Company is concluding negotiations with the Japan International Cooperation Agency (JICA) over a loan of EGP 1.2m ($1.72m) to finance the new terminal at the Borg Al-Arab Airport. The company aims to raise the capacity of the airport to four million passengers a year.
According to Zaki, The loan agreement with JICA had been delayed due to the resignation of Hazem El-Beblawi’s government last month, followed by the formation of Ibrahim Mehleb’s cabinet. He added that the company has finalised contracts with financing agencies through the Ministry of International Cooperation.
The proposed Borg Al-Arab terminal will be operated using clean energy (solar power), and waste will be recycled.
Zaki told Al-Borsa that the Al-Nozha Airport in Alexandria will also be developed, which was closed in 2012, with a total cost of EGP 140m; this will include the renewal of the arrival and departure halls and the passenger terminal in addition to constructing a new airway.
As for the proposed Airport City, which will be adjacent to the Cairo International Airport, Zaki said it would help upgrade the airport’s efficiency and transform it into a large trade complex to serve inbound travels.
He said that a delegation from the world leading airport-building ICOM would visit Egypt this March, as the company has completed the technical and engineering studies for the Airport City over a 10 million square metre area.
The Airport City project will be offered in a bid for Egyptian and foreign investors by June, Zaki said.
Egypt became the 19th member of a list of the countries with airport cities in a conference held in South Africa last year. The list includes 18 other world countries, such as Singapore, Malaysia, the USA, Britain, Germany and South Africa.
The would-be Egyptian Airport City is expected to bring in EGP 1bn of revenues annually from commercial and recreational activities, Zaki estimated.
Moreover, the EHCAAN intends to enhance the capacity of the Sharm El-Sheikh Airport from 8 million passengers at present to 18 million. The company is negotiating with the World Bank over a $550m loan for financing the project.
Increasing the capacity of the Sharm Airport will boost the competitiveness of Egypt’s tourism sector, Zaki said, adding that the majority of the 62,000 rooms in South Sinai is found in Sharm El-Sheikh.
It was previously reported that the European Bank for Development and Reconstruction (EBRD) had offered $154m to develop the airfield.
Similar offers were made by the European Investment Bank, Islamic Bank for Development and the World Bank to finance the Sharm airport development project, Zaki stated. However, EHCAAN prefers the World Bank, he said, for its long experience in developing Egyptian airports.
EHCAAN had previously sought an agreement with the African Development Bank to finance the project, but the stance adopted by the African Union (AU) following the 30 June events in Egypt, namely the ouster of president Mohamed Morsi, did not allow the deal to go through. The AU had suspended Egypt’s participation in all its activities in July 2013.
Zaki told Al-Borsa that EHCAAN had postponed a study for employing an airport maintenance company, as no legal framework has yet been concluded for the project. Maintenance work, such as electricity and cleaning, is outsourced.
Meanwhile, EHCAAN stressed that incentives are offered by the holding company in affiliate airports to encourage incoming passenger traffic.
As part of this initiative, the company had adopted exemptions of up to 75%of duties for aircraft hosting, take-offs and landings at the Cairo airport. This rate is at 50% in the Sharm and Hurghada airports, and 60% in Luxor.
Similarly, the Ministry of Civil Aviation reduced departure fees from $20 to only $8.
Awarding EHCAAN a renewal of the ISO reflects “confidence in the efficiency of services offered to planes in the Egyptian airspace and airports,” Zaki said. He added that the Cairo Air Navigation Centre (CANC) and the monitoring towers in the airports of Cairo, Sharm, El-Sheikh, Hurghada, Luxor, Aswan, Borg Al-Arab, El-Arish and Taba had also been upgraded.
“The air monitoring devices have been replaced or upgraded in accordance with the latest world-acknowledged satellite applications,” Zaki said, pointing to EHCAAN’s participation in an international conference held in Jordan for air navigation providers earlier this month. “An Egyptian paper was submitted on navigation services,” he added.
The total wages of EHCAAN’s workforce in 2013, according to the company chairman, total EGP 894m, marking a rise of 18% compared to 2012.
The company is also studying seven different offers by insurance firms to extend social and health insurance to all staff nationwide, Zaki said.
EHCAAN employees receive medical treatment at EgyptAir Hospital, one of the few places available for the Ministry of Civil Aviation staff to receive medical care.
According to the new health insurance system, the company will offer medical care worth EGP 40,000 to each of its employees annually, as a ceiling for critical cases. It also covers areas not included in the current system, “such as dental care and obstetrics services”, Zaki said.