EgyptAir obtains $191mn loan to pay external loans, leases

Egypt’s Ministry of Finance approved on September 29 “long-term financing” of EGP3 billion Egyptian pounds (USD191 million) to EgyptAir (MS, Cairo Int’l), ordering the Central Bank of Egypt to release the funds in the form of a state-guaranteed loan, the newspaper Al-Ahram and the Middle East News Agency reported. The move came after Egyptian President Abdel Fattah al-Sisi issued Law No 195/2020 authorising the ministry to guarantee the funding, plus Law No 196/2020 allowing EGP1 billion (USD63 million) to be provided to the Egyptian Holding Company for Airports and Air Navigation (EHCAAN). As previously reported, EgyptAir’s chairman and chief executive, Mohamed Rushdi Zakaria, told news channel Al Arabiya one month ago that the state-owned flag carrier had completed procedures to obtain the loan, which carries the condition that it goes towards paying the airline’s external debts such as foreign-currency loans and aircraft leases. The airline had already obtained a EGP2 billion (USD127 million) soft loan from the government in May, which was used to pay employee salaries. EgyptAir, which has been resuming flight operations since July 1, had been in talks about the loan since June with two state-run banks, the National Bank of Egypt – different to the Central Bank – and Banque Misr, according to the newspaper Al-Mal. The approval came as the International Air Transport Association (IATA) reported in its latest traffic report that passenger traffic on Middle Eastern airlines in August was down 92.3% year-on-year compared with 93.3% in July. Capacity was down 81.9%, resulting in a load factor of 35.3%. EgyptAir announced on September 27 that it would resume more routes in early October, from Cairo Int’l to Muscat (2x weekly from October 1), Amman Queen Alia (2x weekly from October 4), Kigali (1x weekly from October 8), Johannesburg O.R. Tambo (2x weekly from October 8) and Entebbe/Kampala (1x weekly from October 9), and from Alexandria Borg el Arab to Dubai Int’l (3x weekly from October 9). It already flies 21x weekly between Cairo and Dubai, the ch-aviation capacities module shows. This makes 688 frequencies on 75 routes resumed in total so far.