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Step by step to recovery

Posted 12 April 2018 · Add Comment

The last couple of years could have not have been a more difficult time to run an airline in Egypt and even now, itís a tough job, says the managing director of Nesma Airlines, Ashraf Lamloum.

“Last year was traumatic. All businesses were negatively impacted by inflation and the currency floating,” said Nesma Airlines MD Ashraf Lamloum.
The situation is slowly being restored to normal, but airlines such as Nesma are not clear of danger yet: “European operations have resumed, but what is the yield? We are chartering the aircraft to travel agents or brokers and they are consolidating the flights but, even then, you’re selling your aircraft at the lowest price.”
For the moment, said Lamloum, Nesma is prepared to operate the aircraft on those services so long as they cover their operating costs and at least part of their fixed costs.
Nesma Airlines is unusual in that it splits its operations between two countries, Egypt and Saudi Arabia. The company has been able to take advantage of the liberalisation of domestic air services in Saudi and has stationed a group of four ATR 72-600 turboprops in Hail, in the north of the country. From there, they serve a small network of secondary northern airports, some of which cannot handle jets. Operations began in November 2016.
Traditionally, turboprops have not found favour with passengers in the Gulf, who have tended to prefer jets. However, said Lamloum, reaction to the Franco-Italian aircraft has been good. “The range between Hail and the other airports is very short, so we’re not facing any performance problem.”
The lukewarm attitude towards turboprops is not just a problem in the Gulf, but throughout the wider Middle East, explained Lamloum. However, if an airport is underserved by scheduled flights and the turboprop can demonstrate good on-time performance – which the ATRs have – people accept them.
Nesma is preparing to step up its operations in Saudi Arabia by bringing in some of its four Airbus A320s, partly to offer enough capacity on heavily trafficked routes such as Jeddah-Riyadh and partly to be able to offer longer, international services from the kingdom.
The A320s will offer a small, business-class area of four seats. This will be European style; with the four-abreast configuration achieved by folding down the middle seat in each row of three standard seats to give business-class passengers more elbow room and privacy – useful if someone is working on documents that he would prefer not to be seen by someone sitting close to him.
This row of seats will have 36in pitch, with the next few rows set at 30 inches and the rest at 29 inches. This may seem tight but, as Lamloum pointed out, it is the same seat pitch used in many major European carriers’ aircraft and it is considered acceptable.
The Egypt-based A320s, meanwhile, will concentrate mainly on services between Cairo and Saudi Arabia during weekdays, with charter flights – particularly to Germany – occupying the weekends.
Nesma’s fleet plans include adding at least one or two ATRs in 2018, together with another pair of A320s from the airline’s Egyptian AOC.
Currently Nesma’s fleet is dry leased but, from this year onwards, it plans to acquire new units on a lease purchase basis.
The Egyptian A320s mainly concentrate on scheduled services from Cairo to Saudi destinations during the week, then revert to charter flights between Egypt and Europe – notably Germany – at weekends.
Indeed, Lamloum believes that expansion for the Egyptian side of the business will come from charter, rather than scheduled, work.
In the early part of the decade, Nesma operated to most western European countries. It was only after Egypt’s political upheavals began that tourism started to drop away, as Europeans started to worry about the security situation in the country. But, after the 2015 crash of Russia’s Metrojet Airbus A321 over Sinai shortly after taking off from Sharm El-Sheikh, European flights ceased completely.
Lamloum would like to see the previous situation restored. European services started again in April 2017. Over this winter season, charter services to Italy and Switzerland are getting under way.
Ideally, he would like to see an equal split between charter and scheduled services.
Like many Egyptian carriers, Nesma has the advantage of a large, inbuilt market of pilgrims wishing to travel to Saudi Arabia to perform the Hajj and Umrah. The latter, in particular, lasts for 10 months in the year and provides guaranteed volumes of high-yield passengers.
In addition, there are huge numbers of foreign workers in Saudi Arabia, who need transport to and from their home nations at the end of contracts or for vacations. Many of them – from Bangladesh, for example – currently do not have direct flights home and have to travel via Gulf hubs such as Dubai and Doha, at additional cost.
An A320 has the necessary range to reach Pakistan and most of India. If something with more range and capacity is required, Lamloum favours the Airbus A330. The new A321neoLR would also have the necessary range, but the managing director believes the new generation aircraft are too expensive, especially for passengers at the economy end of the market. The A330 will be a lower-cost platform to operate initially, he believes, although he does not rule out the neo at some time in he future.
On the staffing front, Nesma is unusual among Egyptian carriers in that it trains its own co-pilots. It naturally hopes that eventually these co-pilots can be promoted to captain but, at the moment, Egyptian regulations stipulate that co-pilots must undertake a minimum of 4,000 hours before being considered for the left-hand seat, unlike most other jurisdictions, which require only 3,000.
The Egyptian regulation equates to roughly two more years before a co-pilot gets his fourth stripe, which is causing something of a bottleneck in promotions.
Nesma is hopeful that a change in the rules is on the horizon. New captains from outside the company usually come to the airline with the appropriate type ratings and just need route training before assuming command.
Nesma can boast a dispatch reliability rate of more than 98%. Partly this is down to a maintenance contract with respected provider Lufthansa Technik, but partly also to the airline’s policy of carrying an engineer on board all its services.
This may seem either over-cautious or wasteful – the engineer is, after all, taking up a seat that could be used by a fare-paying passenger, but Lamloum believes the benefits outweigh the disadvantages.
Apart from anything else, Egyptian regulations stipulate that an engineer, not just a pilot, should be on board, so “It’s more efficient to have an engineer sign off the pre-departure checks. It’s best to have one of our engineers do it, rather than a side contract [with an outside company] and it helps cope with any unforeseen problems.”
The airline has Part 145 certification to carry out all of its own line maintenance, up to ‘C’ checks. It also has its own wheels and brakes workshop and can carry out minor structural repairs. For the heavier maintenance ‘C’ checks, it goes to the open market, usually entrusting its aircraft to Joramco in Jordan of Lufthansa Technik in Malta, although it also uses EgyptAir’s facilities on occasion.
With the security situation at Egypt’s Red Sea airports now gradually being given the all-clear by European nations, and tourists starting to return, 2018 will hopefully be less nerve-racking for Lamloum and his management colleagues than recent years have been.
 

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