The aviation sector in Egypt, both civil and military, is becoming a burden to the state as it seeks to secure significant new aircraft deals amid a tough economic environment.
French newspaper La Tribune reported Tuesday that Egypt had signed a deal with French aircraft manufacturer Dassault Aviation to buy four Falcon 7X airplanes at 300 million euro.
These planes are classified as business jets, and each has three spacious lounges, 28 large windows, an acoustics technology system that limits noise, and an advanced environmental system for comfortable cabin pressure at high altitudes. They carry just 12 to 16 passengers.
Presidential sources denied signing the deal with Dassault Aviation amid media reports to the contrary, but the presidency’s statement did not clarify whether or not another governmental entity made the purchase.
Egypt purchased 24 Dassault Rafale fighter aircraft in February in a deal worth 5.2 billion euro, facilitated by a French loan. In March, Egypt’s Parliament also approved an agreement whereby the Defense Ministry would acquire loans of 3 billion euro and 375 million euro from several French banks as part of a new arms deal. News of this deal appeared just days after President Abdel Fattah al-Sisi announced that he wouldn’t hesitate to make difficult economic reform measures avoided by previous presidents in fear of public protest.
In an address this week during the inauguration of a petrochemical factory in Alexandria, Sisi called for rationalizing consumption, particularly in areas that constitute a burden on the economy. Such calls for austerity come amid a crunching economic atmosphere nationwide.
The US-based Bloomberg News agency published a report on Tuesday on the collapse of the Egyptian economy under Sisi. The report indicated that unemployment has risen to 13 percent while the budget deficit has reached 12 percent of GDP. It also noted that foreign exchange reserves decreased to US$15.6 billion as of July, while tourism continues to deteriorate and Egypt is still failing to tackle a looming water crisis.
The report accused Sisi’s administration of spending huge amounts of money on large-scale projects that yield little benefit, such as the new waterway at the Suez Canal, instead of developing infrastructure.
Egypt announced on Sunday that it had reached an initial agreement with the International Monetary Fund (IMF) worth $12 billion over three years with an interest rate of 1.5 percent in order to confront the rising economic crisis and the fall in foreign exchange reserves.
The government’s economic reform plan, which includes lifting subsidies in many sectors, has been met with much opposition, particularly as prices have sharply increased.
Privately owned daily newspaper Al-Shorouk published an article Monday quoting a governmental source as saying that security reports have requested postponing an increase in fuel prices.
But will the new luxury airplanes help solve the crisis faced by the Egyptian aircraft manufacturing industry?
“Egypt risks damaging its aviation industry if it continues to block the release of hundreds of millions of dollars owed to foreign airlines,” the International Air Transport Association (IATA) said in a statement published by the Dubai-based Gulf News website on Monday. Egypt currently owes $250 million worth of local ticket sales to international airlines, the report said — just a little less than what the government will pay for its new luxury aircrafts.
The statement said the IATA is working with Egyptian authorities “to find a practical solution to release forex [foreign exchange] to airlines in order to avoid any unintended, detrimental effects on the country’s aviation industry.”
A flight to the Saudi city of Yanbu was canceled Tuesday at Cairo International Airport due to the low number of passengers booked on it, while five departures were delayed due to operating conditions, according to a report by the privately owned Al-Masry Al-Youm newspaper.
Crises continue to plague Egypt’s aviation sector, including ongoing repercussions from the crash of an EgyptAir plane flying from Paris to Cairo in May, which killed 66 people.
Sébastien Busy, a lawyer for 19 of the victims’ families, told the media this week of his suspicions that Cairo is trying to hide data related to the accident. He said Egyptian authorities have not responded to calls from French investigators to release maintenance records, and that Cairo was aware of a fault in the aircraft before its takeoff from Paris.
Five months after an announcement that the second black box on the aircraft had been repaired, no official entity has revealed the reason for the crash.
Reuters reported in July that a fire broke out on the aircraft during the flight, but the investigations committee denied this. On August 3, the French foreign minister called on Egyptian authorities to speed up investigations into the crash.
The Russian transport ministry announced on Tuesday that meetings with Egypt to discuss the draft governmental agreement on aviation safety and Russian experts’ visits to Cairo are yet to be set, after Egyptian media reports said a Russian delegation is expected to visit Egypt on August 28.
Russia banned all EgyptAir flights to the country from Egypt last November after the crash of a Russian passenger aircraft in Sinai in October. Egypt’s government conducted several visits with Russian authorities to confirm the safety of Egyptian airports so that flights to Egypt could resume, especially in light of the nation’s deteriorating tourism industry.
Translated by Reem Gehad