Cairo International Airport has a clear-cut ambition: "We want to become both a passenger and cargo hub, particularly in the MENA region," says Ibrahim Ahmed Manaa, chairman of Egyptian Holding Co. for Airports and Air Navigation. "We want to rise to global competitive levels according to international standards and start to gradually apply air transport liberalization policies."

The aim to elevate CAI's function and future started just over three years ago when the Egyptian Ministry of Civil Aviation formed two holding companies, one for national carrier EgyptAir incorporating seven subsidiaries and a second for airports and ATC activities. EHCAAN controls four companiesCairo Airport Co., Egyptian Airports Co., National Air Navigation Services and Aviation Information Technology. CAA is the regulatory body.

The first steps in Cairo Airport's privatization coincided with the launch of a "very aggressive" investment program to upgrade existing facilities and build a new Terminal 3, Manaa tells AE&T. The airport, located about 20 km. northeast of the city, has seven arrival and departure halls spread out over two terminals. Terminal 1, also known as the Old Airport, was inaugurated in 1963 and has an annual passenger capacity of 6.5 million. Terminal 2 dates from 1984 and can accommodate up to 3.5 million passengers annually. T1 has 67 check-in counters, T2 60. T1 has 12 gates, three of which are double-level for large aircraft and all of which use bus transfer between terminal and aircraft. T2 has seven gates with 10 passenger boarding bridges.

There are 131 aircraft stands, of which nine are contact stands, and three runways. Runway 05R/23L is 3,300 m. long, 05L/23R has a length of 4,000 m. and 16/34 is 3,180 m. All are 60 m. wide. Plans for a fourth runway, to be built south of the existing airfield, have been approved. It will be 4,000 m. by 65 m. "and thus A380 compliant," Manaa notes. He proudly adds that the new T3 will have three contact gates able to accommodate the giant. He admits that no carrier has yet indicated it might operate the A380 into Cairo, but he laughs, "We hope that maybe Emirates will do so. Why not?"

Foreign Know-how

In 2004, local authorities decided to outsource the management of CAI and five regional airportsSharm El-Sheikh, Hurgada, Luxor, Aswan and Abu Simbelto an international airport operator. Two separate tenders were launched; Fraport (see box, p. 14) won both, but under the bidding rules a company could be awarded only one of the projects. Fraport indicated its preference for managing the Egyptian capital's international gateway and the contract for the regional airports was awarded to Aeroports de Paris. The CAI management contract runs for eight years with the option to extend it twice by one year. Under the terms of the contract, Fraport is not required to invest in either Egyptian Airport Co. or the airport's infrastructure.

"It is the first time for Egypt to have a non-Egyptian airport operator. This is a major change," states Cairo Airport Co. Chairman Mohamed Fathalla Refaat. He admits it has been "a very tough process to try to understand and to interact" but he describes the move as positive and necessary. "We want to develop our human resource capacity to improve our performance and our level of service," he explains. "Moreover, we want to get the know-how on how to implement an international hub strategy. Historically CAI is essentially a point-to-point airport, but we want to increase the connectivity with our neighboring airports. We want to develop Cairo as the main transit point for the MENA region." He argues that CAI has the necessary ingredients to become a successful hub: "We are located at the crossroads of Africa and the Middle East, Europe and the Gulf area. In addition to this central location, Egypt enjoys all-year-round excellent weather, allowing for smooth ATM throughout the year."

Fraport began work in February 2005 and seconded five senior executives to CAC in the positions of executive director, CCO, CFO, chief technical officer and COO. "Together with our Egyptian colleagues, we introduced practices to improve the efficiency and increase the productivity in a short term of the airport and of the staff," says CCO Jean-Pierre Tabet.

There are two kinds of training programs: A 60-day course including 20 days in Frankfurt for senior executives, and training for around 100 middle management that also includes a few days in Frankfurt. Tabet says, "Frankfurt is one of the most efficient hubs and developed airports in the world. It is important to gain hands-on understanding of how it works at FRA rather than listen to us explaining how it is done."

In the first six months of the contract, some 14 different teams came from Frankfurt Airport to help draw up so-called "diagnostic reports" on all aspects of CAI's operations. "We looked at everything, going from engineering and insurance to finance, operations, commercial activities, safety, security, health," Tabet recalls. "We identified some aspects that needed immediate adjustments and started implementing the recommendations."

One of the first areas of Fraport input visible to passengers is the improved food and beverage offerings. Refaat says, "In fact, we did not have any variety in F&B. EgyptAir provided all catering. Now we have more variety and more concepts." A new coffee bar, Ritazza, operated by Louis Catering/Compass Group, was opened at the new International Arrival Hall 3 in T1 in August 2005 and was followed by a similar outlet in T2. Terminal 2 mainly serves international carriers whereas T1 is considered the EgyptAir terminal. The public area in Departure Hall 1 in T1 saw the addition of a Pianola food outlet and a new Food Village was set to open in mid-February in T2. A themed AirMall is currently in the pre-opening preparation phase. It fits into Fraport's concept of AirportCity and is the first of its kind in Egypt.

New Terminal

The T1 and T2 renovation and development plan was finalized last year and represented an initial investment of EGP0.5 billion (E74 million). It contains some 43 projects, some of which were reconstruction of the infrastructure, electricity, water, drainage and air-conditioning systems. It also includes demolishing the old Hall 3, previously used for domestic arrivals and departures, to construct a new hall for international arrivals.

Meanwhile, work started on a new passenger terminal, T3. The 23-gate complex, scheduled to open in late 2007, will include a main three-level structure and two concourses and will be capable of handling initially up to 11 million passengers yearly. An aerial walkway will link the 164,000-sq.-m. facility with T2. T3 is being co-financed by the World Bank, Egyptian government and National Investment Bank of Egypt. Cost of the project is almost EGP2.2 billion (E320.5 million).

"A new ATC tower and a fourth runway represent an additional E100 million investment and a new five-star hotel, which will be connected with T3 through a 330-m.-long bridge, is another E40 million," Manaa sums up. "We want to achieve the highest level of activity and return on investment. Concretely, this means that we are reviewing everything, also landing fees, parking fees and departing passenger taxes. We are benchmarking CAI against surrounding airports. Cairo Airport is government-owned yet not subsidized by the government."