With billions of dollars of investment expected in Egypt’s new Airport City in addition to EgyptAir expanding its fleet and flight routes, Egypt is confident it will maintain it’s position as the leading aviation hub in Africa.
Ahead of the Egypt Economic Summit in March 2015, you recently announced that an agreement has been reached with the Ministry of Investment on investment mechanisms in the airport city project that will be established in the vicinity of Cairo International Airport?
I must say I am very much interested in this subject as airports are no longer just lands, runways and landing fees. International airports nowadays do not depend only on the profitability of aviation activities, but in accordance with the global trend, commercial and investment projects are the main source of airports income. These projects also achieve several other targets, including the participation of the private sector and providing jobs to young people, increasing profitability and supporting the national economy in addition to introducing new services for passengers and airports’ frequent comers.
Several meetings were held with Minister Ashraf Salman, Minister of Investment, the last of which was on October 27 which addressed investment mechanisms in "Airport City" as an investment zone around the Cairo International Airport and the completion of the procedures needed to call investors to the tenders prior to Egypt's next Economic Forum in March 2015. It includes a number of projects and commercial and service activities, air freight and logistics services, which will contribute to the further development of the national economy. During the meeting, we also agreed on the executive steps for the call for tender in order to increase the country’s revenues from this enormous project.
The studies which were carried out by the World Experienced AECOM a specialized company in the studies of establishing cities around airports, had ended its studies several weeks ago and made it clear that Egypt’s outstanding and unique location, will be No. 19 in the world in the implementation of airport cities (Airport City) and utilizing the location of Cairo International Airport as a hub as such projects had proven a big success in 18 cities around the world.
Expected investment needed for the Cairo Airport City?
The expected volume of investments is more than 80 billion pounds, and the expected revenues from the project according to the studies are up to 422 billion pounds till the year 2040.
Job creation of the project, both short term and long term?
It is expected to provide about 30 thousand direct jobs and about 90 indirect jobs.
Spin off industries expected to come from the airport city?
The Airport City is a huge investment city that invests in projects related to the aviation industry, this type of investment is based on serving the airport and maximizing its revenue from commercial activities not related to aviation and will be divided into commercial and industrial zones, such as international logistics area, stores, in addition to a zone for the compilation of light industries, where one of the characteristics of Cairo International Airport that it is near to Ain Sokhna port, where it can activate the trades of assembly of components and packaging to be a final product that can be transported by air.
The total area of the Cairo Airport City project is 10 million square meters divided into five areas designated for transporting, storage, handling of transit goods that enters the country, the logistics zone to serve huge cargos that can take up to thirty aircraft, and an investment zone for several activities such as training centers for aviation professions, hotels and restaurants area, amusement park for transit passengers, and solar farm to generate electrical power necessary for the region.
Incentives being offered to investors in the Cairo Airport City?
The nature and location of the project and its association with Cairo International Airport makes it an attractive project for Egyptian and international investments, in addition to the expected size of the investment, which is more than $12 billion. The project offers great investment opportunities for Arab and foreign investors in a very distinctive area in Cairo. The initial phase of the project has been offered where 10 investors had applied to participate in the tender, the rest of the phases of the project will be offered in an international tender for Egyptian and foreign investors with "BOT" or “PPP”.
The studies for that project were conducted in 5 stages, including a study of existing projects around the airport and a study of the most important required activities, environmental studies, study for the basic financial, funding and contractual costs and finally amarketing plan that significantly takes into account offering many incentives and facilities to attract investors.
EgyptAir is currently the leading airline in Africa, but in order to maintain that position, it will need to invest billions of dollars updating its fleet and its airports. Steps being taken to increase fleet, expand routes, and maintain the position of leading airline in Africa?
The Ministry of Civil Aviation is working to endorse the leading role of Egypt in the region and to create more channels of cooperation for the establishment of joint projects between Egypt and neighboring countries, in addition to the permanent support provided for African companies in the fields of civil aviation, training, maintenance, and air safety.
EgyptAir has gone through tough times over the past period, but is now witnessing noticeable improvement after the political stability and the return of passengers’ traffic. Still there is a development plan for the company in the coming period that aims to improving the product and the services provided and studying the losing routes, as well as marketing for festivals and conferences in Egypt.
EgyptAir is targeting a significant recovery plan over the course of two years till October 2016, through financial and administrative restructure so as to reach profitability or break-even point.
This company has been able to avoid losses during the first quarter and turn to profitability during the same period compared to last year. The high operating movement and mechanisms implemented by the company have contributed majorly in achieving positive results.
In addition, the company was able for the first time from four years to achieve a profit during the current fiscal year after it has incurred 10 billion pounds losses during the last 4 years. With regard to EgyptAir’s fleet, there is a project for fleet modernization and expansion, as the Ministry of Civil Aviation plans to increase EgyptAir fleet to 127 aircraft by the year 2025.
In the framework of the efforts of the Ministry of Civil Aviation to strengthen relations with the Nile River Countries, the National Company EgyptAir continues its expansion plan in Africa by flying to 18 African cities at the moment, including 7 cities in the Nile River countries (Khartoum and Juba, Addis Ababa, Asmara, Entebbe, Dar es Salaam, and Nairobi). Two new lines were also opened one for Abidjan in Ivory Coast, and Harare in Zimbabwe and there are studies now to open 4 new lines of Douala and Yaounde in Cameron, Luanda in Angola, and Dakar in Senegal.
Expansion of both domestic and international airport terminals
Ministry of Civil Aviation is seeking to increase the capacity of airports through expansions and development projects at Cairo International Airport and domestic airports such as Borg Al Arab and Nozha in Alexandria, Sharm el-Sheikh and Hurghada airports to accommodate the increase in passengers’ traffic, and to support air cargo and the development of the surrounding areas at airports, and the allocation of new land for expansion of commercial activities in order to provide more job opportunities for young people.
We have opened last December the new terminal at Hurghada airport, with the capacity of 7.5 million passengers annually. The new building is one of the important projects included in the development plan of the Egyptian airports as it increases the capacity of Hurghada airport to the percentage of 115% so the total capacity will be 13 million passengers a year instead of the current capacity of 6.5 million passengers.
Projects and investments made by the Civil Aviation Ministry in the field of Egyptian airports have contributed to the increase of the capacities of airports, and it is planned to increase the capacity of the Egyptian airports to reach 75 million passengers with the completion of the current expansion projects.
Development of Human Resources
In the light of the competition and the requirements of the domestic and global markets, owning professional skills and being able to efficiently applying it became indispensable for any organization or company in order to achieve success at work. Hence the Ministry of Civil Aviation pays great attention to continuous training for the development of the human factor, as the Ministry has firm belief in the importance of qualified human resources as they represent the primary basis for growth in the current and the next stage.
The ministry is organizing many training courses for employees to improve their skills and competence and upgrading them to the highest levels of performance. The Ministry is also concerned with continuous upgrade of training methods to elevate the efficiency of the development programs designated to raise the level of performance and refinement of experiences and change work ethics from just routine work attitude to wise decision-making personnel that can assume responsibilities in order to achieve a better future for the civil aviation sector.
The growth and progress of our country lies in the minds of their citizens and their perception that investment in the human element is one of the major factors for achieving the desired development and productivity.
Development of airports and aviation sector around the Suez Canal to compliment the major investment being made to expand the canal
The launch of the new Suez Canal Project, carries a positive political message to the world, about the return of stability to the country and moving forward to the reconstruction and development process, and in this context, the Ministry of Civil Aviation is seeking to have effective role in the new Suez Canal project as one of the most massive government projects of the time, as there is a study to link the Airport City with the new Suez Canal through a new railway line with Ain Sokhna port and Cairo International Airport after the establishment of "Airport city" with the aim of serving the investment and the transport of goods from Ain Sokhna port and the region to the large cargo village that will be established in the coming period under the expansion plan of Cairo international Airport to be a major assembly and distribution center of passengers and cargo.
The line will also serve the new investment zone near the new Suez Canal, in order to facilitate the exchange of goods and cargo operations, and certainly there will be a need to establish airports at the region, and the first studies were made on Ras Sidr Airport.
Reality of Cairo becoming a major international aviation hub and the gateway into Africa region
Cairo International Airport is the gateway to Egypt and the African continent, and one of the largest airports in the continent in terms of congestion and passengers’ capacity, its importance increases after EgyptAir has joined the Star Alliance and making Cairo Airport as a hub linking Africa, the Middle East, and Europe. Cairo International Airport includes three terminals (1), (2), and (3).
Terminal 2; a project financed by the World Bank and being developed by the Government of Egypt is expected to be completed in 2015. Once completed, the new terminal will be able to handle an annual capacity of passengers of 7.5 million.
Terminal 2 at Cairo International Airport was opened in 1986, and it is dedicated primarily to foreign airlines, currently a re-building process is ongoing that is financed by the World Bank with an investment of 2.9 billion pounds, with the aim of doubling the current airport area and raising the capacity of the building from 3.5 million passengers to 7.5 million passengers per year and increasing the number of air bridges from 7 to 14 Bridge, and modifying aircraft loading area, in addition to increasing the number of aircraft parking areas. The development process started in July 2008 and is expected to be completed by the end of 2015, so Cairo Airport's capacity will become 30.5 million passengers a year, and will be connected to Terminal 3 by a bridge, so as to facilitate the movement between the two terminals.
There are also several measures to strengthen the position of Cairo Airport as a hub for cargo and passengers, especially in light of the substantial growth witnessed by transit passengers at Cairo Airport, by developing the customer services at all Egyptian airports and all Egyptian airlines.
With the fierce competition faced by Egyptian airports and airlines by other international airports and companies, especially in the Middle East and Africa region, we must improve our services and add new products and services to meet the needs of customers, as the customer now has lots of options and his choice depends on the assessment of his travel experience in general, including airport services, and airlines services, whether he enjoyed his flight and if it meets his expectations, that grows day after day. This comes in addition to the development of information technology in order to facilitate business and raise the level of services provided to customers through digital systems at airports and self-service kiosks for check-in.
The ministry also pays much attention to international standards and measures of international organizations, particularly those related to maintaining safety and security and the preservation of the environment in all Egyptian airports in order to put Egypt in the ranks of developed countries concerned with civil aviation as one of the most important sources of the national economy.
The international community, especially the United States, has closely monitored events in Egypt over the past two years. Through two historic revolutions, the United States has held firm in its support of the Egyptian people in their bid for an inclusive, democratic government. As Egypt continues its difficult but unwavering commitment to a democratic future, its citizens look forward to sustained support from the United States.
Both Egypt and the United States share a historic long relationship extends to the nineteenth century, through years, they were able to maintain diplomatic and economic relations that can be described with mutual understanding and respect, which resulted in the so-called strategic dialogue between the two countries. Egypt and the United States were keen to identify together three major goals for their cooperation, a regional peace and stability, fighting terrorism, and economic reform. We highly appreciate the respect of the United States of America to Egypt as one of the large leading countries in the region, as well as its support for the aspirations of the Egyptian people towards democracy, stability and economic development.
On the economic side, we are optimistic about the next stage and we expect to restore the capacity of passengers coming to Egypt after improving Egypt's image abroad thanks to the diplomatic efforts and active political movements that confirmed the decline of terrorism and the return of normalcy to the country, as well as after the launch of a number of major development projects that are perceived by Egyptians with great hope in the future improvement of their situation and the possibility of the return of economic growth.
Expected participation from the United States in the Aviation sector
The civil aviation industry is based on the cooperation and the international agreements; and with the increase of air transport passengers and cargo across the continents, there is a need for further consultation, coordination and cooperation between the governments as well as between the various governments and officials of the civil aviation industry in order to reach new ideas for the advancement and development of the industry.
Under the policy adopted by the Ministry of Civil Aviation to create an attractive environment for investment and the establishment of foreign relations with international institutions on the basis of competency and mutual respect, the ministry launched a range of different civil aviation sector investment opportunities in many of the existing development and construction projects, the most important project is Airport City, which will be announced as an international tender during the Egyptian Economic Forum held in next March and the United States of America will have the opportunity to choose to participate in this enormous investment project.
The growth of US-Egypt business relations and the importance the aviation sector plays in that role
There are discussions between the Egyptian government and Washington over supporting Egyptian American means of cooperation in economic, trade and investment fields. As for the field of civil aviation, we enjoy close relations with the United States of America in all areas of air transportation, and a good example of that cooperation is that the fleet of the national company EgyptAir includes a large number of the latest types of the American aircraft Boeing.
The Ministry of Civil Aviation presents many incentives for international airlines and tourism companies to encourage them to fly to Egyptian airports, from which American companies can benefit, such as the following advantages:
The Ministry of Civil Aviation also presents incentives for airlines operating at touristic cities airports that reach up to 60% reduction on the total movement as follows:
Ministerial decisions have been also issued to increase the flow of tourists to Egyptian airports, and to overcome the decline in operating rates. The decisions Include: exempting aircraft at Hurghada airport from fees of using loading bridges for a period of 6 months, for the new Hurghada Airport which was opened few month ago. The decision also includes exemption from paying for the fire services at airports of (Luxor, Aswan - Sharm el Sheikh - Hurghada - Taba - Marsa Matrouh) when refueling during the presence of the passengers on the aircraft. There is also a ministerial decision to reduce duties on aircraft weighing more than 200 tons at airports of Luxor, Aswan, Sharm El Sheikh, Hurghada, Taba and Marsa Matrouh. In addition to all that, foreign airlines that operate flights directly to the airports of Luxor, Aswan and Marsa Matrouh are exempt from royalties imposed on them.