At the start of 2017, KLM will cease flights to Cairo, the capital of Egypt. According to the company, they made this decision due to the devaluation of the Egyptian pound, and the restrictions placed on transferring foreign currency from Egypt by the Egyptian Central Bank. KLM calls it a temporary measure but Hans Korsten, who has been living and working in Egypt for years, calls it an omen, and wrote the following:
In the 1990s, KLM still flew to Cairo seven times a week, and the route enjoyed such a high occupancy rate that ‘fully booked’ was the rule rather than the exception. The composition of passengers was roughly divided into 50 per cent westerners and 50 per cent Egyptian, and the flights were typically on ‘wide body’ aircraft. This changed significantly especially from the Arab Spring onward, and the number of flights per week was cut back to four by the company. Despite this reduction, I, as a frequent flyer, can conclude that the occupancy rate on these flights is still dramatically low (pictured right). While this is pleasant for me as a passenger, it is economically fatal to the company.
This has now become apparent. KLM is stopping, and based on my own findings, I am not surprised, but I am disappointed to have go without this familiar Dutch quality service. In recent years I had already noticed that the number of western passengers per flight could be counted on two hands. To me, this was proof that the interest of European and American companies in Egypt was severely reduced, and that one of the pillars of the Egyptian economy, foreign investments, had declined to an insignificant level. One of the aims of airlines is ‘maximising their destination.’ It is therefore an omen that KLM cancels a destination - that goes against this aim. Indeed, it is not going well with Egypt, or perhaps I should say: Egypt is doing badly economically - it is standing at the edge of an abyss. There is a currency crisis, foreign investments are not forthcoming, tourism has completely collapsed, revenues from the Suez Canal are far below budget because of the decline of the global market, and to top it all, revenues from guest workers have decreased enormously. This is because hundreds of thousands of Egyptians from countries such as Libya, Iraq and even the rest of the oil-rich Middle East, have returned home due to war and / or economic instability. In short, the entire foundation of the Egyptian economy, meaning its sources of hard currency, has been wiped out.
A drop in the ocean, Egypt was recently given 14 billion dollars by the IMF, but that is hardly comparable with the 360 billion that went to Greece. As always, the IMF attached conditions to this sum, for example, abolishing fuel subsidies and implementing VAT. The population, which was not doing well at all to begin with, will have even less to spend, poverty will increase, and the 14 billion dollars will evaporate in no time. The government is taking all sorts of draconian measures to defuse the currency crisis. For example, a maximum has been set on how much Egyptian travellers are allowed to put on their credit card while abroad. This enforced limitation of expenses determines, for example, the length of stay regardless of whether or not this is sufficient. Imagine that as a business traveller! With the tragic situation of Venezuela in mind, my heart is in my throat.
I can happily report that, in all of this misery, the agricultural and horticultural sector developed explosively in the last two decades. Export income, the much-needed hard currency, has therefore increased by leaps and bounds. However, this is nowhere near enough to support a population of 90 million, mostly destitute, people. Yet the government should not be allowed to put the slightest obstacle in the way of this sector’s development. I assume that if Europe recognised that every kilogram of fresh produce from Egyptian soil represents a relief from the catastrophic economic distress, people would sooner buy products of this origin. A purchase characterised by a pure form of sustainability.
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Hans Korsten
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26 Gelf El Choueifat
5th District, New Cairo
Cairo, Egypt