{"id":617347,"date":"2024-03-20T00:00:00","date_gmt":"2024-03-20T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/egypt-looks-towards-airport-expansion-smart-policy-and-the-private-sector-to-support-its-ambitious-aviation-goals\/"},"modified":"2024-03-20T00:00:00","modified_gmt":"2024-03-20T00:00:00","slug":"egypt-looks-towards-airport-expansion-smart-policy-and-the-private-sector-to-support-its-ambitious-aviation-goals","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/egypt-looks-towards-airport-expansion-smart-policy-and-the-private-sector-to-support-its-ambitious-aviation-goals\/","title":{"rendered":"Egypt looks towards airport expansion, smart policy, and the private sector to support its ambitious aviation goals"},"content":{"rendered":"

Efforts to upgrade and expand our aviation sector cleared for takeoff:<\/strong> When President Abdel Fattah El Sisi won his third term in office, the Madbouly government laid out a six-year strategy<\/a> to overhaul Egypt\u2019s aviation sector, in a bid to boost tourism inflows and turn the country into a cargo and transit hub. To meet these ambitious targets, the government has been expanding the country\u2019s airports and adding new ones, offering flight incentives, and even working towards getting private players to run the nation\u2019s airports.<\/p>\n

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BIG TARGETS-<\/p>\n

Fasten your seatbelts and stow away tray tables<\/strong>, the government has some ambitious aviation targets to reach by 2030 that it laid out in theCabinet Information and Decision Support Center\u2019s report (pdf)<\/a>, including:<\/p>\n

#1- Boosting the airports\u2019 total capacity to 97.4 mn passengers a year <\/strong>from last year\u2019s 64.8 mn \u2014 with particular focus on Cairo International Airport, aiming to raise its capacity to an annual 31.6 mn passengers.<\/p>\n

#2- Raising tourism revenues 20% annually to USD 45 bn by 2030<\/strong>, up from the USD 13.6 bn recorded (pdf)<\/a> by the central bank in the previous fiscal year. To help reach this target<\/a>, the government wants to see Egypt welcome<\/a> 30 mn tourists annually by 2028, more than double the 14.9 mn tourists that visited<\/a> in 2023.<\/p>\n

#3- Improving the ranking of national flag carrier<\/strong>, by pushing EgyptAir\u2019s global ranking to 30th place \u2014 it is currently ranked 95th globally.<\/p>\n

#4- Expanding abroad:<\/strong> The country\u2019s six-year aviation strategy sees our aviation sector expanding internationally, particularly in Africa. It also sees the country diversifying the travel routes offered and attracting more tourists.<\/p>\n

#5- Having a bigger and better air freight fleet<\/strong>, to bolster logistics capacity with a fleet numbering at least 130 by the end of El Sisi\u2019s third term.<\/p>\n

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BIGGER, BETTER AIRPORTS-<\/p>\n

Some airports are due for significant expansions and upgrades<\/strong>: <\/strong>The new terminal that the government plans to add to the Cairo International Airport will double the total capacity and accommodate an additional 30 mn passengers per year, according to a cabinet statement<\/a> in January. Egyptian aviation companies also signed three framework agreements<\/a> with China\u2019s largest construction company in October to construct a new passenger terminal at Hurghada Airport and to develop Cairo International Airport including by building a new hangar.<\/p>\n

And plenty of new ones are also being built or have just opened: <\/strong>Cairo got another airport last year, after Sphinx International Airport received its flight in February 2023<\/a>. Airports are also planned, under construction, or have been recently opened in the new administrative capital, Ras El Hekma<\/a>, El Alamein, Berenice, Bardawil, and in other cities across the country.<\/p>\n

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A LITTLE PUSH-<\/p>\n

Charter flight incentives have helped increase tourist arrivals: <\/strong>Hungary\u2019s Wizz Air<\/a>, the UK\u2019s easyJet<\/a>, and other budget airlines from Europe and also the region have been steadily increasing their routes to the country \u2014 supported in no small way by the government\u2019s charter flight incentive program. Under the program<\/a>, the government pays chartered flights a certain amount depending on the route and the number of passengers on board to incentivise airlines to expand routes to Egypt and offer tickets at a more attractive price point. The program was again extended<\/a> in October until April 2024.<\/p>\n

EgyptAir also has a part to play: <\/strong>Increasing investments and diversifying destinations for the national carrier EgyptAir is part of the aviation sector\u2019s growth strategy leading up to 2030, our Civil Aviation Ministry source told us. The government wants to better utilize the carrier\u2019s resources to promote Egypt-bound air travel and improve the carrier\u2019s reputation after it fell out of Skytrax's list of the hundred top airlines<\/a> in 2023.<\/p>\n

And it\u2019s already investing in increasing and modernizing its fleet:<\/strong> In November, EgyptAir placed an order for 18 new aircraft from Boeing<\/a> and another for 10 new A350-900 jets from Airbus<\/a>.<\/p>\n

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PRIVATE SECTOR ENTERS-<\/p>\n

Airports management shakeup is a go:<\/strong> The Madbouly government has started the process of bringing in the private sector to manage and operate the country's airports, which the government argues<\/a> will both improve services and increase revenues collected by state coffers. An international tender will supposedly soon be launched to hand over the reins to qualified companies to run Egypt\u2019s airports, which the International Finance Corporation sees<\/a> as one of the four most attractive and lucrative areas for privatization.<\/p>\n

Rewind:<\/strong> The Madbouly government first revealed plans last November<\/a> to invite private sector players \u2014 including foreign companies \u2014 to take over the management of airports in the country. Momentum has been building in recent weeks, with Civil Aviation Minister Mohamed Abbas Helmy confirming in late February<\/a> that the plan was in motion and that the government will soon launch a tender. A few days later the cabinet announced<\/a> it had kicked off the executive process to offer the management and operation of the country\u2019s airports and was looking for \u201can international consultant with extensive experience\u201d to set a professional roadmap for the tender.<\/p>\n

Which airports are up for the tender?<\/strong> The final list of airports to be included is still being studied and will be determined after consultation with an international consultant, cabinet spokesperson Mohamed El Homsani told CNN Arabic<\/a>. Homsani also told CNBC Arabia earlier this month (watch, runtime: 2:05<\/a>) that all airports will be under study to potentially be offered in tenders, including Cairo International Airport.<\/p>\n

When?<\/strong> It's too early to specify a launch date for the tender as the consultant is yet to be appointed to determine the best approach, a Civil Aviation Ministry source told Enterprise. He expected it will happen sometime in the second half of the year after the consultant conducts due diligence on all airports and prepares a comprehensive feasibility study. In an interview with Al Arabiya (watch, runtime: 5:02<\/a>), Homsani explained that such large-scale initiatives usually take time, but that he expected the studies phase to be completed within weeks.<\/p>\n

What's on offer:<\/strong> Management, operations, and passenger services are the key components up for grabs through the upcoming tenders, our source at the Civil Aviation Ministry said. The ultimate goal is elevating Egypt's airports to international standards with improved passenger facilities and larger capacities, in addition to boosting returns on the bns invested in recent years to modernize airport infrastructure, the source added.<\/p>\n

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Your top infrastructure stories for the week:<\/strong><\/p>\n