‘The progress is satisfactory’

ATEF ABDEL HAMID MOSTAFA, chairman, EgyptAir, talks to SHAFQUAT ALI about the airline’s restructuring process and its future plans

TTN: It’s three years since EgyptAir was restructured into a holding company overseeing seven affiliated companies with each having its own separate management. Has the move improved the airline’s efficiency, performance and bottom line according to expectations?
Atef Abdel Hamid Mostafa: Certainly, the restructuring of the former EgyptAir into EgyptAir Holding Company and seven subsidiaries has resulted in numerous improvements in terms of performance and efficiency.

As expected, each of the business is being managed as a company by a dedicated administration and, on an economic basis, is receiving more attention. This is all directed towards providing better services to customers with an eye on profitability.

Is the airline’s ambitious reform plan going according to plan? External factors like the rise in fuel prices may not have helped matters but were there any other obstacles you have faced internally along the way?
We can confidently state that the airline’s performance is improving in line with the reform plan. However, it is true that external factors in the world as well as in the region have adversely affected the results. In addition, certain reform measures – like changes in the airline’s network – were, in many cases, met by reluctance. Without the effects of those external and domestic factors, results would have surpassed the plans.

You sought foreign expertise to achieve the optimum performance for the fleet, grow the network and improve the airline’s method of managing and marketing. How much did that help EgyptAir’s restructuring process?
The assistance acquired in the form of consultancy services from international experts was valuable and contributed together with the efforts of EgyptAir’s dedicated project teams to the achieve the desired results.

On the positive side, post-Tsunami, you gained as a large numbers of Arab tourists adjusted their vacation plans away from the Far East and towards Egypt, in particular. Did that help matters?
The diversion of part of the tourism traffic away from the Far East and towards the Middle East had helped only marginally.

You have, reportedly, blamed most of the serious problems the airline is facing on “the old management system”. Over the last three years, what have you done to deal with issues like over-employment – apparently, EgyptAir employs nearly twice the number of staff it really needs?
We never really blamed any problems on the old management system. We realise that each era has its own circumstances and dominant philosophies according to which business is run. In order to deal with the problem of over-employment, we have adopted a new policy that aims at establishing new lines of business which can absorb part of the surplus human resources after providing them the requisite training while, at the same time, improving the skills of workers for our core lines of business. Examples of these new lines of business are the production of plastic products used in packaging catering meals and the production of various types of uniforms. A new line that is under study is the production of plastic interior panels for aircraft. Our vision in that regard is that we have to view and deal with human resources as an asset not as a burden.

Having been managed by the government for so long, EgyptAir’s employees had become used to waiting for someone to look after them and giving them bonuses even if they did not work to deserve it. As part of your reform plan, what steps have you taken to change that mindset?
Several steps have been and are being taken to change this mindset. The mission statement and the vision and the strategic directions which were set for EgyptAir Group clearly indicated that this mindset has to be changed. Communication with employees over the past few years has been intensified, messages about new concepts pertaining to economics-based performance and performance-based appraisals are being conducted through staff meetings at different levels. In addition, a number of periodic bulletins and company magazines have been recently launched.

What steps have you taken to project a new image for EgyptAir?
Improving the image of EgyptAir is mainly centered around enhancing customer satisfaction and bettering our dealing with them starting from the time he is booking his ticket until he reaches his travel destination.
We are focusing on training staff, who deal directly with customers. Special attention has been given to cabin attendants through a programme which has yielded significant improvement as perceived by customers. In order to ensure continuous improvements, we are focusing on feedback from customers which translates, whenever required, into actions and plans.

How do you plan to make the airline more competitive and profitable?
The ongoing improvements in customer service together with the efficient management of pricing and capacity availability will make EgyptAir more competitive and, over time, profitable.

The distinguished service for passengers travelling First and Horus class from Cairo Airport has been very well received. Are there any other improvements in the pipeline to better the quality of service?
Several steps have been taken to improve the quality of service and many more are in the pipeline which will be extended to frequent-flyer programmes and focus on facilitating the process of booking and ticketing significantly. A new call centre is about to start operating, thus allowing customers to book their flights and purchase tickets through a phone call. Booking flights and purchasing tickets through EgyptAir’s web site will also be made available to customers within a few months.

Is EgyptAir working with the tourism industry in general to generate more business?
The objective of promoting tourism in Egypt goes hand in hand with the interest of the airline. Coordination and exchange of ideas with key persons in the tourism industry is a continuous practice dictated by the common interests.

Discontinuing or suspending routes may help cut down losses but, in the long run, it may affect the airline’s credibility…
In principle, we disagree with this assumption. It is natural that airline networks evolve in reaction to market conditions as well as for the sole purpose of optimising the overall performance. Airline network is not supposed to be static.

Having taken delivery of the first two of seven Airbus A330-200s on order as part of your fleet expansion plan, could you elaborate on EgyptAir’s route network expansion plans and what are the thrust areas of growth?
In line with our strategy, the Middle East and African markets are considered as areas of potential growth.

Gulf Air and EgyptAir have a strategic alliance under which the two carriers cooperate to provide more convenient air travel services in the Middle East as well as greater connectivity to destinations around the world. How much has EgyptAir gained from this alliance and are you exploring such other tie-ups?
Like in all cases of strategic alliances, both concerned parties work on a win-win principle. Having partnership in the form of codesharing and alliances is part of our strategic plans.

Are you personally happy with the rate of progress EgyptAir has made since you took over office and where do you see the airline five years from now?
Yes, I am satisfied with the rate of progress so far. I can envisage the airline five years from now expanding its fleet and intensifying its operation through Cairo Airport as a traffic hub.