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EgyptAir Looks to Bank Loans to Cover External Debts

EgyptAir looks to bank loans to cover external debts as the state-owned carrier struggles to deal with the fallout from the coronavirus pandemic.

The airline’s chairman and chief executive, Mohamed Roshdy Zakaria told Al-Borsa newspaper on June 8 that the carrier was negotiating with the National Bank of Egypt and Banque Misr to get the loan as EgyptAir has EGP13 billion (USD805 million) of external debt. EgyptAir is losing nearly EGP1 billion (USD62 million) a month since the COVID19 pandemic struck three months ago.

In May, the Egyptian Ministry of Finance said it would lend EgyptAir EGP2 billon (USD120 million) to help it deal with COVID19 fallout after the carrier suspended scheduled international passenger flights in mid-March. Cabinet spokesman Nader Assad told Sada El-Balad TV last month that Egypt was considering a slow resumption of international flights in late June or early July. Repatriation flights have continued, with more than 12,000 Egyptians returning home, he said.

EgyptAir and other carriers will find some financial relief through a reduction in airport landing and parking fees. On June 9, Civil Aviation Minister Mohamed Manar Enaba said his ministry will give airlines discounts on certain services at selected airports, including a 50% discount on landing and parking fees and a 20% discount on ground services, Daily News Egypt reported.

The following day, Egypt’s cabinet announced in a statement that it will waive 50% of the late payment charges on monthly jet fuel arrears that EgyptAir’s holding company owes to the Egyptian General Petroleum Company (EGPC). EgyptAir will also have its debt restructured and paid off to the EGPC over eight years. In May, the Ministry of Petroleum agreed to drop the price of jet fuel once air traffic returns to normal levels.

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