Cairo Airport Moves Forward

A DECADE AGO, FEW PASSENGERS traveling through Cairo International were eager to repeat the experience. Back then, baksheesh (tips) for routine services, dirty toilets and flight delays were the norm. Airlines simply accepted a lack of organization and the leisurely pace of management and airport staff as the cost of doing business. But CAI has been working hard to shake off its negative image and more importantly to raise the standard of operations, professionalism and levels of service through a vast investment program.

The remarkable change was triggered by the creation in 2002 of the Ministry of Civil Aviation, which promptly launched "a very ambitious, very aggressive plan to modernize all the Egyptian airports," Egyptian Holding Company for Airports and Air Navigation Chairman Ibrahim Manna tells ATW. "Between 2003 and 2009, we spent EGP7.2 billion ($1.31 billion) on airport and ATM projects and it is our goal to invest a total of EGP16.2 billion by the end of 2012," he says, pointing out that all investment projects are financed by EHCAAN.

Like EgyptAir, EHCAAN is owned by the Egyptian state, but it operates as an independent commercial entity and is financially and administratively self-supporting. It controls four subsidiaries: Cairo Airport Company, National Air Navigation Services Company, Aviation Information Technology, and Egyptian Airports Company, which manages the country's 19 regional airports.

In the first phase of its investment program, EHCAAN gave funding priority to a handful of regional airports primarily dedicated to tourist traffic such as Sharm El-Sheikh and Hurghada, Manna confirms. He notes that it is "logical to spend our money on airports that bring in tourists." The government applies an open skies policy to its regional airports, "which also contributes to their rapid growth," he reckons.

The development of a dynamic tourism industry is one of the main pillars of Egypt's economic policy. Travel and tourism contribute 15% to GDP and provide 12.6% of domestic employment, according to WTTC statistics for 2009. The regional airports handle the majority--up to 60%--of Egypt's total passenger throughput and include some outstanding performers. Sharm El-Sheikh, for instance, ranked fourth among ACI's Top 25 fastest-growing reporting airports in 2008 with an impressive 20.8% annual passenger increase to 7.75 million. In fact, Egypt had three airports in the ACI Top 25 (behind only China with five), with CAI ranking 14th and HRG placing 16th.

The economic downturn interrupted the country's steep growth curve of the past decade and 2010 passenger traffic declined 2.6% to 34.9 million, according to EHCAAN data published on its website. In contrast, CAI increased passenger throughput, albeit at a marginal 0.2%, to 14.38 million. This still compares favorably with the world average decline of 2.6% reported by ACI. Between 2003 and 2008, passenger movements at CAI rose 74% from 8.3 million to 14.4 million (including a notable 14.2% growth in 2008 and 16.7% in 2007), firmly establishing it as Africa's second-largest aerodrome after Johannesburg's O.R. Tambo International. JBO handled 19 million passengers in 2008.

Some 50 scheduled airlines operate to the airport, plus an additional 13 charter and 10 cargo carriers, on a network spanning more than 70 destinations. It handled 142,993 flight movements last year, an average of 392 per day, up 3.6% on 2008. CAI has no night curfew and plenty of runway capacity, which will expand further to 120 movements per hr. when it places its third parallel runway into operation later this year. Runway 05L/23R (4,000 m. x 65 m.) is ICAO Code F aircraft compliant and lifts its airfield system to four full runways--albeit only temporarily, as plans exist to change 16/34 (3,178 m. x 60 m.) into a taxiway. Later this year a striking lotus-shaped, 120-m.-high control tower, designed by Aeroports de Paris, will be inaugurated.

CAI's redevelopment is based on the Ministry of Civil Aviation's strategy outlined in 2002 to reposition it from essentially a point-to-point airport to a passenger and cargo hub and simultaneously to reorient its home carrier's focus to that of a network operator with up to 20% transfer traffic.

"The two are linked. The main player to achieve our goal [to become a hub] is our national carrier. We are working closely together," says Manna, echoing a similar statement from his counterparts at EgyptAir Holding (see article, p. 20). Owing to the unique combination of its Middle Eastern/Arabic heritage and its geographic location at the north of Africa with the Sinai Peninsula forming a land bridge with west Asia, CAI is seeking to position itself as a hub serving the MENA region.

The close cooperation between airline and airport and CAI's commitment to achieving its goal became visible last year when EgyptAir and its Star Alliance partners moved all of their operations to the brand new Terminal 3. The first dedicated Star terminal in the world, T3 enabled the carrier to reduce connecting times from 90 to 60 min. in the summer 2009 schedule. The EGP3.2 billion facility was opened officially by President Hosni Mubarak in December 2008 and has an annual passenger capacity of 11 million, virtually doubling the airport's total capacity to 22 million. The U-shaped building, based on a design supplied by Schiphol Group in 1992, comprises a main building and two symmetrical concourses. At the end of each concourse is a 1,500-sq.-m. A380 dedicated gate and holding area. On the airside, the terminal is equipped with 23 contact stands and a further 37 remote ones, of which two can handle the A380.

"We're ready for the A380," Manna emphasizes. "I believe only two airports in Africa can accommodate the A380, Johannesburg and Cairo," he adds with barely concealed pride. So far no carrier has firmed plans to operate the new widebody to CAI, but the airport's market planning department has identified three possible initial routes: Dubai, Singapore and Frankfurt.

Airport City

While lacking the frills to impress with opulence, T3 is a showcase of efficient use of space, with well-conceived passenger processing and integration of state-of-the art technology (self-service CUSS kiosks, biometric immigration gates and a fully automated baggage handling system with integrated online screening at four different levels). ARINC, which is T3's IT systems supplier, provided its ARINC SelfServ for the CUSS kiosks, iMUSE common-use passenger check-in and departure system, AirVue flight information display system, and AirDB airport operational database and LocalCheck local DCS for airlines without host connections. It also installed the world's first context-aware operational platform at the terminal to control all employee access to critical ramp control and management applications.

T3 is just one component of the airport's total makeover, which started with upgrading of its oldest facility, Terminal 1, and construction of an adjacent "AirMall." Rehabilitation and expansion of Terminal 2 is next, representing an investment of $436 million. As with T3, the World Bank will finance up to 70% of the project and local banks the remainder, the EHCAAN chairman revealed to this magazine just after concluding the negotiations at the end of January. Work is planned to start in 2011 and last 36 months. The renewed T2 will be able to handle 7.5 million passengers annually, 4 million more than at present, and will lift CAI's passenger capacity to 26 million by 2014, the same year in which an eight-year management contract with Fraport terminates. The agreement can be prolonged by three years.

"There is a very good relationship between the Egyptians and Fraport, and ADP [which manages five regional airports under a contract ending in 2011]," Manna emphasizes. Yet, he adds openly, "I need the opportunity to rethink if we will extend these contracts. We have the know-how now to manage airports by ourselves, sure."

Slowing Growth

He does not anticipate that CAI will continue to see the 12% annual passenger growth experienced between 1998 and 2008 and believes a leveling at 6%-8% is "very reasonable." But, he admits, "with the World Bank I have to be conservative and I forecast a 3.3% growth from 2014 onwards. Of course I expect more; I'm optimistic."

Meanwhile, work is progressing on construction of an automated people-mover to improve the land connectivity between T1 and T2/T3. T2 and T3 are adjacent to each other and linked with a skybridge, but T1 is located more than a mile away. The 1.8-km. track is expected to go into operation by mid-2011. Work also has started on a multistory 3,200-space car park located near T2, a five-star hotel in front of T3 and expansion of Cairo Cargo City, and the EHCAAN board has approved the realization of an Aero City complex to be built on 2.8 million sq. m. of land bordering the airport premises.

Aero City will include a business park, a theme park, several shopping malls and 18 cinemas. Singapore-based DPArchitects Pte. has been contracted for design of the complex, Manna says, while revealing that "negotiations with MGM have started" for the theme park. Development of the Aero City concept is part of EHCAAN's strategy to maximize revenue from nonaeronautical activities. For the regional airports the nonaeronautical/aeronautical revenue ratio is 70%/30% while CAI's stands at 56%/44%.

The airport operator does provide incentives (i.e., discounts on landing fees) to airlines to support new routes or increased frequencies, though access to CAI is not a given. In contrast to the regional airports, the Ministry of Civil Aviation does not apply an open skies policy to EgyptAir's home base. Analysis by OAG and the Centre for Asia Pacific Aviation for the week commencing Jan. 4, 2010, shows that MS holds a 60% share of capacity at the airport, followed by Saudi Arabian Airlines with a 6% share of total seat supply. Emirates, Alitalia and Kuwait Airlines each have a 2% share.

Manna acknowledges that Cairo International would benefit from an open skies policy. "More airlines mean more passengers and more cargo, thus more revenue and more profits," he states, pointing once again to the fact that EHCAAN is self-sufficient. So far it has performed well as an autonomous company: Revenue rose from EGP508 million in 2003 to EGP2.8 billion in 2009. "But we follow the law," the general and former fighter pilot continues. "The decision of the Ministry of Civil Aviation is very clear: Any airlines, e.g. from Europe, that bring tourists to the country are allowed to fly into CAI. Access is restricted to airlines that are heavily subsidized by their governments and don't bring in tourists," he says without naming carriers. "It is a sensitive issue," he concludes.