EgyptAir has finalized a deal with aircraft manufacturer Boeing to buy nine Boeing 737-800 planes, the most up-to-date versions of the 737, in a deal worth around US$864 million, or LE9 billion.
The purchase represents the resumption of a program put in place before the January 25 revolution, a program that aimed to reinvent and greatly improve EgyptAir’s operations. The program was put on hold, however, due to the political turmoil since 2011.
The new deal coincides with the Farnborough International Airshow in London, according to the wishes of Aviation Minister Sherif Fathy, who feels the coincidence means added publicity for EgyptAir in the global context.
Egypt Air's popularity took a hit in May with the downing of an Airbus A320 over the Mediterranean Sea, with the loss of 66 lives. Investigators are still investigating the cause of the crash, with a technical fault and terrorism two possibilities under consideration.
The funding for eight of the new 737 planes will come from Dubai Aerospace Enterprise, which will lease the planes to EgyptAir for six years. After that, EgyptAir will take ownership of the planes, in a purchase process desiged to reduce their overall expenditure. The Egyptian national carrier has sustained huge losses in the recent past, exceeding LE13 billion, making any large purchases from its own coffers impossible.
EgyptAir hopes the new aircraft will help return it to it's former glory, as well as putting a stop to rumors of planes that are past their safe use-by date or poorly maintained. The company aims to return to the Star Alliance, allowing it to compete with other regional airlines who may be hoping it fails entirely.
EgyptAir’s first internal flight was in 1935, from Cairo to Alexandria, while their first international flight, in 1934, took passengers to Palestine. In 1936, EgyptAir was the first airline to land a plane at Medina in Saudi Arabia, a city considered holy by Muslims.
In recent years, however, EgyptAir’s fleet has begun to shrink, giving the advantage to other key airlines in the region, particularly from Turkey, Qatar and the UAE. Even Ethiopian Airlines has started to compete with Egypt Air, attempting to displace it from the African market.
However, the new aircraft are expected to help EgyptAir fight back. Safwat Muslim, the chairman of Egypt Air, has announced details of the planned renewal of the fleet, with 105 aircraft expected by the end of fiscal year 2020/2021.
The next step is for the management of EgyptAir to find solutions for some of the company's other problems, including high expenditure, with the international offices costing LE2 billion per year. The company currently employs 37,000 people, but says it would run more efficiently with just a third of that number.
