Lufthansa German Airlines is considering suspending sales of its tickets in Egyptian pounds starting from November, and limiting sales to US dollars or credit cards, which would make banks responsible for securing dollars to clients. The move results from a delay of dues owed to the airline by the Egyptian government amounting to €15m.
Zied Gueblaoui, Lufthansa’s Egypt country manager, said that the company is suffering from the shortage of hard cash in the market, highlighting the sums owed to the company that reach €15m—equivalent to EGP 150m. This, he added, impacted the office’s financial results.
Several airlines in Egypt have complained about the difficulty of obtaining their US dollar-denominated dues from the local market amid shortage of hard cash made available by banks to foreign companies operating in Egypt.
Gueblaoui told Daily News Egypt that the situation pushed the company to consider a number of possible solutions to avoid the accumulation of their dues, pointing out that the final solution will be implemented starting November. “One solution is suspending sales of tickets in Egyptian pounds and limiting sales to US dollars or via credit cards,” he added.
Moreover, he said that the company may resort to shutting down its tickets office in Egypt, or even go as far as exiting the market if the crisis continues. “The company will not accept the big losses it endures in Egypt,” he stressed.
He noted that Lufthansa, through the International Air Transport Association (IATA), is seeking to get a clear plan from the Egyptian government about receiving its dues. The plan, he explained, would include the means and the timing. “We understand the current economic conditions, and will not seek our dues in full at once.”
He went on saying that the negative impact of the current situation will affect scheduled flights, contrary to charter flights.
He stressed that the company does not intend to introduce amendments to its flights from and to Egypt in 2017, except for adding four winter-season flights to Hurghada and Marsa Alam.
Lufthansa currently operates 29 weekly flights between Egypt and Munich, Zurich, and Frankfurt airports, through the group and its affiliate companies, including SWISS and Austrian Airlines.