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Egypt Denies EasyJet Access to Cairo

Bapun Raz

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Egyptian authorities are refusing to award low-cost carrier EasyJet programmable logic controller (PLC) take-off and landing slots at Cairo airport unless it overhauls its no-frills approach and offers other services, according to sources, a Wall Street Journal report said.

"Technically, we can fly" to Cairo, Carolyn McCall, Chief Executive, EasyJetl said. McCall added that the airline still hasn't been given clearance by Egypt's aviation authorities and that they were still talking to authorities on how that would work.

After the UK and Egypt in June 2010 extended a bilateral agreement, the UK Civil Aviation Authority awarded EasyJet three weekly landing slots from October 31, 2010. The agreement between the two nations raised the number of weekly slots on the London to Cairo or Alexandria routes to 14 slots from 11, but also capped seating at 4,500 per week in each direction.

The bilateral agreement permits only scheduled UK airlines to land at Cairo or Alexandria and were previously split between British Airways—since January a unit of International Consolidated Airlines Group SA—which has seven weekly slots, and Deutsche Lufthansa AG's British Midland International, which has four. Bmi also borrows three weekly slots from Star Alliance partner EgyptAir.

EasyJet originally had hoped to start flights to Cairo in November 2011 but its application for certain time slots was rejected because of its low-cost model, said people familiar with the matter.
In order to gain approval, they said EasyJet has been asked to change its no-frills strategy, including having two classes of service instead of one at present, halting the sale of food on board and introducing a member of staff to collect taxes.

A spokesperson for the UK Department for Transport said discussions were still open but those talks had "hit a hiatus" when civil unrest erupted at the start of the year. The spokesperson said "talks will resume shortly," adding that the current situation hasn't meant EgyptAir has been prevented from using its full allocation of slots in the UK. "Whether they are using them all would be an operational matter for the airline, but they are certainly within their rights to do so," the Department for Transport spokesperson added.

At the moment, the foot-dragging doesn't pose a problem to the EasyJet because of the subdued demand for travel to Egypt since unrest broke out across the North African and Middle Eastern earlier this year. Still, there is hope the government will take a different approach and agreement can be reached soon.
EasyJet already flies to Sharm el Sheikh, Luxor and Hurghada in Egypt, but those airports come under the open-skies agreement and need no approval from the civil aviation body. About 15 million tourists visited Egypt in 2010, according to the Egyptian Ministry of Tourism.

Its unlikely EasyJet will adapt its strategy and any drastic change may not go down well with the U.K. Civil Aviation Authority, which granted it the slots ahead of BA and bmi.

In September 2010, the CAA awarded EasyJet the additional slots because the carrier would introduce a no-frills service operating from Gatwick, which would lead to the greatest consumer benefit and increase competitive pressure on Heathrow airport services.

Egypt has started offering airlines incentives to fly to the tourism-dependent North African country as it seeks to stimulate demand and stop carriers from slashing capacity.

The incentives come in the form of a reduction in levy charged to airlines that is worth about USD 5 per passenger, or as payments to carriers for unfilled seats to discourage them from cutting numbers of flights to Egypt or deploying smaller aircraft that carry fewer passengers. The offer started at the beginning of March and is open-ended, meaning the Egyptian government could pay incentives that run to more than USD 100 million over the course of the year.

Still, while some airlines have restored capacity following civil unrest, capacity remains below peak levels.

EasyJet, which traditionally flies to Europe, inherited the Egypt route when it bought GB Airways about three years ago. Since then, it has tested such routes under its own brand and expanded further into the Middle East, recently launching flights to Jordan.

http://www.travelbizmonitor.com/egypt-denies-easyjet-access-to-cairo-13566
 
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