National carrier EgyptAir prepares to launch a lower-cost airline it's dubbing "EgyptAir Express" to service national and some regional routes
Egytair is looking to get into the low-frills carrier business. As the national carrier prepares to celebrate its seventy-fifth anniversary this coming April, EgyptAir Holding Co. (EHC) announced plans last month to round out its mix of services a new subsidiary flying small, mid-range planes on national and some regional routes.
In announcing the formation of its ninth subsidiary last month, EHC also revealed it was signing a deal with Brazilian aircraft manufacturer Embraer to buy six mid-range EMB-170 aircraft to be used as the EgyptAir Express fleet, with an option to purchase six more.
The deal, worth $170 million at list price, will see the first EMB-170 delivered to Egypt next April in time for EgyptAir Express will launch its services. The remaining five planes are due to be delivered through May and June 2007.
Newly appointed EgyptAir Express Chairman Mohamed Hassan said, "Those jets will enable EgyptAir to generally upgrade its flight services and serve more regional markets, thus adding diversity to its services."
The economical EMB-170 jets, with 76 seats arranged in a single class, employs advanced navigation systems while offering wide seats and aisles and spacious overhead luggage compartments, making it one of the larger-sized aircraft in its class.
"Technology, comfort and economics are second to none in terms of these jets. Their electronics are very sophisticated. Their individual seats are similar to those of the Airbus 120, and there are no middle aisles to allow for the creation of more comfortable traveling in smaller crafts," says Frederico Curado, Embraer's executive vice president for the airline market.
"A smaller aircraft usually means smaller space," he says. "There is some sort of compromise. However, the case is different with Embraer jets. Our jets are very new, designed from a blank page to allow our engineers to use the latest technology available."
"Using larger jets for domestic and regional operations increases our operating expenses because they burn up more fuel than smaller crafts, which in turn adversely affects demand of our regional operations," says Atef Abdel Hamid, chairman of EHC. "The EMB-170 are smaller aircraft with higher fuel efficiency, which should translate into lower airfares."
Abdel Hamid explains that using lower-capacity aircraft for domestic and regional routes will enhance EgyptAir's overall economic performance, as reasonably priced tickets will increase the number of flights, bringing in much better revenue. "Besides, having a fleet entirely dedicated to serving domestic and regional markets will enable EgyptAir to use its jumbo jets to better operate international flights."
Embraer in the Middle East
This is Embraer's third commercial aircraft sale to Arab airlines since 2005. Saudi Arabian Airlines has so far received 10 out of 15 EMB-170 jets it has ordered, while Royal Jordanian Airlines has ordered seven of Embraer's largest model, the EMB-195, with delivery scheduled to begin later this year.
"The Middle East is a very new and important market that is constantly evolving," says Curado. "EgyptAir has a worldwide reputation and is a very important carrier in the Middle East, and for us at Embraer, it is very important to have an association with them. And this [deal] fortifies relationships between [Egypt and Brazil]."
With 37 years of experience in designing and manufacturing aircrafts, Embraer has become a leading manufacturer of commercial jets with up to 110 seats. Its jets operate worldwide in countries including Italy, China, the US and Canada. It makes the third-largest annual delivery of commercial aircrafts after Boeing and Airbus and currently has an order backlog worth $10-$13 billion.
EgyptAir currently has a fleet of more than 50 aircraft, all Boeing and Airbus; by the year 2010, its fleet is projected to have reached 64 aircraft. EgyptAir's domestic flight operations account for around 20% of all the national carrier's flight routes. Besides its domestic operations, EgyptAir Express will fly to regional destinations including Lebanon, Syria, Saudi Arabia, Libya and even Greece and Cyprus.
Abdel Hamid says, "That regional fleet will fill in a gap that exists during high seasons such as Umrah flights to Saudi Arabia during Ramadan."
By Sherine El-Madany
© Business Today Egypt 2006
