2019

Egyptair holding company

Angie Mohamed Ashraf

Group D
5/3/2019
 Egypt Air is Egypt’s national airline that was established as a privately owned
business in May 1932, turning into the seventh air transport on the planet.The carrier is
based at Cairo International Airport, its primary center point, working planned traveler
and cargo administrations to more than 70 ends in the Middle East, Europe, Asia, Africa
and the Americas. A far reaching system of residential administrations is additionally
centered on Cairo, Egypt’s capital. Egypt air Holding Company had 20,745
representatives of which 7,620 work in Egypt air Airlines.

In the present era of dramatic changes in the air transport services sector, this paper examines
the link between the extent of liberalization and the performance of the Egyptian airline
market. The study is conducted at the route level, and due data unavailability it is limited to
the biggest Egyptian carrier, namely EgyptAir. Estimation results show that air liberalization
reduces EgyptAir’s fares but have two conflicting effects on its number of passengers. A
direct negative impact on EgyptAir’s number of passengers due to their switch to other
carriers and an indirect positive effect due the reduction in fares. Simulations show that the
net effect on the number of EgyptAir’s passengers is negative. However, the decrease in the
number of EgyptAir’s passengers does not mean a decrease in the number of passengers to
and from Egypt. Even with a constant income, the number of passengers to and from Egypt
might increase if competition results in lower fares for all carriers. Some of the existing
passengers just switch from EgyptAir to another carrier. Provided the other carrier is
Egyptian (existent or newly created), the total revenues of travel to and from Egypt should
not change for the Egyptian economy. In addition, simulation concludes that the consumer’s
surplus increases while that of producer declines; hence, leading to a net positive effect on
society welfare. Therefore, if the aviation authority wants neither to waste the society welfare
nor to create disincentive for the Egyptian producers to liberalization measures, it should
adopt the liberalization measures with twin strategies: fostering effective entry of domestic
carriers and fostering competition among these carriers.

Egypt air and the Monopoly on board.

 Financial information.

The Egyptair Holding Company has achieved substantial benefits in the previous years,
arriving at us$176 million amid the 2008/2009 monetary year. It has resources of more
than us$3.9 billion. For the financial year finishing 29 July 2007, Egyptair accomplished a
record all out income of us$1,350 billion. Aggregate gathering income developed by 16
percent, as contrasted and the earlier year.

 The Market Share.

Concerning Egyptair, it has a piece of the pie of more than 95 percent in 2009. In spite
of the fact that it is a 100 percent government claimed holding, it didn’t take any state
help however not prohibited by law; it profiles itself as “self account status without any
administration subsidy” and state help is “not under dialog”. At normal Egypt air has
nearly 72 percent of market shares while the competitors only achieve a maximum of 28
percent of market shares comparing to Egypt air. Egypt air, despite an intense
environment with declining benefits, is pressing ahead with the development of its
aircrafts and is adding additional destinations of the line in an offer to lift piece of the
overall airline industry and gateway in Cairo as a passage to Africa. Egyptair considered
one of the world’s fastest growing markets.

Currently, the national airline company got continually increased rates simply by
practically 60 percent during the last three years, citing the inflation of gas rates and
also growth programs while causes. The increase applied on the grouped thirteen value
slots for economy class and also two for small business class. Nevertheless soon after
crunching the amounts, it shows that the portion improve is significantly above public
states. The ticket prices in economy class jumped in between 30% to 55 %, while in small
business type reach up to seventy-five percent. Nevertheless Abdel-Hamid had been
nonchalant concerning the increase in prices even though conversing with reporters
with a news discussion to go into detail your choice on 25th February”It won’t definitely
make any difference for marketers and also rich persons; they’re not going to grumble,
“. Instances of the cost modifications include the Cairo to Luxor inside the economy type
rose through LE685 to LE1,035; Cairo to Abo Simbel ticket in economy type which
increased through LE885 to help LE1685 and also from Cairo to Aswan inside the similar
category class jumped from LE770 to LE1, 330. The increase in prices was lower on Cairo
to hurghada and Cairo to Sharm El Sheikh routes, the increase in both routes from
LE680 to LE850. Many tourism companies and agencies whined that high domestic
routes rates have influenced their business, In addition, Egyptair is restraining
infrastructure of residential courses.

Shockingly, Abdel-Hamid refused an Egyptair imposing a monopoly on the local

business sector regardless of the way that generally it is the main administrator and
operator of domestic routes

Egypt air’s Profits and Losses.

 Profits.

The national company Egyptair has recorded significant benefits in the previous years,
arriving at Us$180 million amid the 2007 and 2008 budgetary year. this is strengthened
by enormous resources of more than 4.2 billion dollars. The aerial shuttle’s money
related year is from May to June. For the financial year finishing on the 31th of July
2007, Egyptair accomplished an achievement downright income of $1.150 billion dollar.
Aggregate gathering income developed by 16%, as contrasted in the earlier year.
  Losses.

Taking after the upset of 2011, Egyptair is accounted for to have endured extensive
losses. Egypt’s aviation Minister Wael El Madaawi said the carrier lost an expected 1.5
billion Egyptian pounds, or nearly $192 million, between the 2012 and 2013 financial
year, fundamentally because of an increment in fuel costs, the depreciation of the
Egyptian money and nonstop strikes inside the organization. (Assy, 2011)Misfortunes for
2011 and 2012 were clearly nearly triple the 2012 and 2013 figures. The bearer has
apparently endured aggregate misfortunes of more than 8 billion pounds, or almost 1.5
billion since 2011 started. (Galal, 2011)

Conclusion:

In the end, notwithstanding the way that the monopoly market creates less yield at
higher costs and the negative ramifications on social welfare and consumer surplus; in
addition, the presence of imposing the monopoly market are certain the length of firms
look for only profit maximization and additionally expanded piece of the pie and at last
a control on market dominance. Concerning the free market economy, the possibilities
of supernormal benefits will inevitably sway different firms to endeavor to break into a
monopolistic business. The danger of rivalry or even a monetary risk of a competition
will drive a monopoly to wind up exceedingly financial productive. For instance, Egypt
air that considered Egypt’s national airline that was established as a privately owned
business in May 1932, turning into the seventh air transport on the planet. In addition,
this paper includes Egypt air’s financial information that accomplished a record all out
income of us$1,350 billion and its market share that has a piece of the pie of more than
95 percent in 2009. In spite of the fact that it is a 100 percent government claimed
holding and normally have significantly higher percentage of market shares than the
competitors. Nevertheless, Egypt air’s monopoly on board and the continually increases
in prices to maximize profit. Finally, the estimation and evidence of profits and losses to
show whether Egypt air maximize profits or lose which is the total revenue > total cost.

Egyptair Marketing plan :

1. Attract premium customers by operating double daily connections to

most of destinations
2. Improve and develop the most efficient network structure to identify the
best long haul opportunities with new wide bodies
3. Increasing Egypt air airlines share to traffic flow and shorten minimum
connecting times
4. Gate to Africa with star alliance by working closely with Star member
South African Airways to connect Africa to other Star hubs through Cairo -
and could develop this further with a connection in central Africa
5. Enhance in-flight service with a new product to match the requirements
of Star Alliance."
6. adjusted network and fleet strategy accordingly by giving more attention
to short- and medium-haul routes
7. Increase frequencies to key destinations like London Heathrow, Paris,
Amsterdam and Istanbul.
8. Complete study with a global consultant to further optimize the net
work’s connectivity of strategic travel flows through the Cairo hub
In consideration of an expanded and efficient fleet
So, our market here is the international airlines transportation for
passengers market. This market is currently governed by number of
factors:
- Emerging spots and destinations that make the world map approximately
whole covered, with a new concentration on the evolving business centers
in Asia.
- Arising in the corporate business internationally that positively influences
the travelers income, and number of business travelers.
- Shifting of tourism industry from spots, which used to be very busy to new
ones, because of political unrest and terrorism, the shift from Middle East
generally towards Europe, of course Egypt is one of the badly influenced
markets.
- Higher expectations of customers because of the blowing competition and
having new players in the market.
- Increase of air alliances that govern the business.
- Instability in fuel prices, that tend to be lower though! With more
appreciation of the US dollar.
* In light of these factors, and according to a Global Airlines Market
Research Report published by IBIS World in 2015, the global revenues
have reached 727 bn$ with an annual growth of 3.1% from 2010 to 2015,
Over the five years to 2020, passenger numbers are expected to rise as
income levels increase worldwide and business spending ramps up.
* Unfortunately, in the light of current situation in Egypt, and number of
incidents related to security that one of them involved an EgyptAir airplane,
EgyptAir is not expected to have a big share of such a growth in the market
demand. In the financial year of 2013-2014 7.4 million passengers have
flied EgyptAir, the company says in its annual reports that it intends to
maximize this number to reach 12 million passengers and their fleet to 99
aircrafts by 2020, no numbers are available to indicate the decline or
increase in these numbers in the following years! However, according to
the international official and non-official reports, one thing we know, is that
EgyptAir is not one of the top 10 airlines companies in the global aviation
market share.
Differentiation
1. It has a very strong brand image in the airline industry and it is one of the
most preferred brands in the world
2. It has 9 subsidiaries catering to various aspects of the airline industry
such as cargo, ground services, in-flight services etc
3. It has the tag of being the first IOSA certified airline in Africa
4. Egypt Air is a state-owned company with special legislation permitting
the management to operate as if the company were privately owned
without any interference from the government
5. Has presence in over 75 destinations across Middle-east and Africa
Board of Directors
Objectives
1. Customer Focus, Both internal/external.
2. Profitability, Favorable relation between revenues / costs.
3. Staff Professionalism, Increase staff motivation /professionalism.
4. Retain and improve frequent business class traveler’s market share.
5. Promote Egypt tourism activities and introduce Egypt to the world.
Product Development
* EgyptAir Holding Company is the Egyptian corporate for carrier services,
including mainly EgyptAir airline services, and also EgyptAir Cargo,
EgyptAir Express, EgyptAir Maintenance & Engineering, EgyptAir Ground
Services, EgyptAir In-flight Services, EgyptAir Tourism & Duty Free Shops,
EgyptAir Medical Services, EgyptAir Supplementary Industries Company. It
also has stakes in Air Cairo, Smart Aviation Company, Air Sinai, Egypt
Aero Management Service, LSG Sky Chefs Catering Egypt and Civil
Aviation Finance and Operating Leases – 'CIAF-Leasing'. This marketing
plan focuses only on EgyptAir Airlines Services.
12. Communications Management
Hawks Team
(One Team, One Dream)
Marketing Penetration
1. There is no financial backing from the government
2. Complex business structure
3. Limited brand awareness as compared to leading brands
1.Internal Flights:
AbuSimbel , Alexandria , Assiut , Aswan , Cairo , Hurghada , Luxor , Marsa
Alam , Marsa Matrouh , Sharm Elshikh , Sharq Elowainat

EgyptAir Holding Company and its subsidiaries achieved a net profit that amounted to
LE 951 million for the first six months of the fiscal year 2018/2019, which by far
surpassed the profit achieved in the same period for the fiscal year 2009/2010, EgyptAir
Holding Company President Ahmed Adel announced in a meeting with Egypt’s Minister
of Civil Aviation Younis al-Masry on Tuesday.

A number of EgyptAir Holding Company leaders attended the meeting as well and
presented the company’s plans and future targets until 2025 with implementation
mechanisms and the planned timeframes.

The meeting also reviewed EgyptAir’s current and future business plans and
development demands, which include the plan to double the fleet and the development
of the customer service center to improve the quality level through contracting with a
specialized company in this field, as well as updating the website to comply with
international standards of protecting the personal data of customers.

The company’s plan aims to maximize revenue and rationalize expenses, upgrade the
Egyptian Air Operations Center (IOCC), and renovate the company’s lounges during the
year 2019/2020, as well as study the representation of EgyptAir abroad.
References :

https://www.ukessays.com/essays/economics/monopoly-market-egypt-air-1907.php

https://prezi.com/ie0gig0ngnax/egyptair-marketing-plan/

https://ww.egyptindependent.com/egyptair-holding-subsidiaries-record-le-951mn-net-
profit/