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Talaat pilots FlyEgypt towards a new destiny

Posted 5 April 2018 · Add Comment

Setting up a new airline, even at the best of times, is one of the most difficult enterprises that a business executive can undertake. But how does one do it in even more challenging circumstances?

As well as the normal financing, marketing and recruitment problems that any new business must surmount, few industries have as many regulatory hoops to jump through before getting to the point where they can actually begin revenue operations.
When you add to that the problems faced by FlyEgypt in early 2015, when it was preparing to fly its first passengers, the situation must at times have seemed overwhelming.
You feel that CEO, Ahmed Tarek Talaat, is employing under-statement to its fullest extent when he says: “The security situation was still a bit sensitive.”
It was just a few months after the crash of Russia’s Metrojet Airbus A321 over Sinai and the subsequent halt on flying into Egypt’s Red Sea airports by many European carriers. And the new airline had to persuade potential tour operator customers that it could provide a reliable service with just a single aircraft in its portfolio: “Even when we got the second aircraft, it was still very difficult,” admitted Talaat.
“But if you fast-forward to now, tourism is really starting to flow back again and, for a small company like us, it’s been really amazing.”
FlyEgypt now operates a mix of roughly 70% charter flights and is integrating scheduled services into the mix. Germany has proved to be a particularly rewarding market, with the company racking up a remarkable utilisation of 16 hours a day to service the European nation, whose inhabitants are some of the most enthusiastic visitors to its Red Sea resorts.
“Utilisation has sky-rocketed and we’ve been able to get back on track with the flight development plan,” said Talaat. Each aircraft – the airline now has four Boeing 737-800s, with two more due to be delivered in spring 2018 – typically undertakes two round trips a day between Egypt and Germany.
One of those new aircraft will be the company’s first purchased example. The others are on dry lease.
On the scheduled side, FlyEgypt operates services from secondary Egyptian airports such as Alexandria, Assiut and Sohag to Kuwait and Jordan, with new routes due to be added to Saudi Arabia this year. Jeddah and Riyadh will be the first two destinations in the kingdom.
In Europe, the UK and Scandinavia are high on the priority list for FlyEgypt “as those routes have a high yield compared to other Western European destinations and they are very kind to the aircraft in terms of maintenance cycles.” Cutting the ratio of take-offs and landings to the number of flying hours places less strain on airframes and, thus, eases maintenance and repair expenditure.
Talaat, who used to be a pilot with EgyptAir, has an ambition to make FlyEgypt his country’s first true low-cost carrier (LCC) that offers value-for-money products. LCCs are proliferating in the |Middle East and North Africa region, but although this means more competition, Talaat is convinced that low prices help stimulate and enlarge the market by attracting passengers who have previously not flown at all, or only very occasionally.
LCCs are the way ahead, he firmly believes: “If you’re flying for just one hour, you really need just a clean seat and a good flight attendant. If you want a bottle of water and a sandwich, that’s great, but anything more just means passengers paying for something they don’t really need.”
However, charters also provide an avenue for expansion: “A very small percentage of inbound tourists are carried by Egyptian airlines.” A good, efficient, reliable Egyptian charter airline is potentially a more efficient option for European tour operators, believes Talaat.
Russia, with its large tourist volumes, remains out of reach at present because of rules that bar Egyptian charter companies from operating into that country. And FlyEgypt’s information is that it would be difficult to offer lower prices than those charged by Russian carriers, anyway.
However, given FlyEgypt’s success in solving problems to date, it would not be surprising if they found a solution to that particular situation, either.
 

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