Cairo International Airport has just posted its busiest August ever — more than 3 million passengers, up 9%. Egypt is doubling down with a 14 million passenger Terminal 4. And this week, a presidential order to build investment zones around Egyptian airports and bring private operators in. Can Egypt turn its airports into an asset class? My guest today is Sameh Saad, tourism and hospitality expert and former adviser to Egypt's Ministry of Tourism. Mr. Samer, welcome back to Fintech TV.
Thank you. Good afternoon. My pleasure.
From inside that system — is aviation capacity now the single binding constraint on Egyptian tourism?
Let us start by saying that 72% of the mass tourism which comes to Egypt comes through Hurghada, Sharm el-Sheikh, and Marsa Alam — mainly on direct charter flights. The 3 million handled through Cairo airport are locals and tourism as well, including many Arabs who have houses and feel this is their second home. Marketing-wise, we do not have a problem — everybody wants to come to Egypt and we always have new destinations. But the problem is the logistics to serve this number and send them home happy. So we need more airports, more space, more aircraft to reach 30 million.
Cairo handled more than 3 million passengers in a single month and the president ordered complaints be monitored and fixed. Is the real constraint shifting from demand to service quality — and how far is Cairo from Dubai or Istanbul?
We are a little bit far from Dubai in terms of passport handling and many things. But we are much, much better than five or ten years ago. I myself travel through Cairo airport all the time and I feel some improvement. But there is still a way to go. Istanbul airport is huge and full of facilities, but it is a real mess unless you know the airport — you could run from one terminal to another for 15 to 20 minutes. For me, Dubai is more organised. I hope Cairo airport reaches that point. The president has ordered a new Terminal 4 and hopefully it reaches 40 million passengers per year. We are sure we will reach this.
Terminal 4 is a $4.5 billion bet on 40 million more passengers. How does the money come back?
All of what you said together — landing fees, passenger taxes, retail shops, and so on. And having those passenger numbers, I am sure it will come back. Remember that we made Terminal 2 and Terminal 3 the same way — they cost a lot, we took a loan, and it paid back. So definitely they have the feasibility study for the same reason.
The president also ordered investment zones around Egyptian airports. What does a serious investor actually get in one of those zones?
What we are actually looking for is cargo. We have a good opportunity to export fresh vegetables, flowers, and goods — but we need more cargo space and more cargo companies to come and work through. That is probably where it comes to asking investors. This has a high cost. And of course hotels — we have very few hotels around the airports and we need them. So it is all of those things, not just how to receive an aeroplane. You have all the services and logistics around it.
Eleven airports are being prepared for private partnership with the IFC advising. The state keeps ownership. Will management concessions without ownership be attractive enough, or will operators demand more control?
Definitely they will ask for more control and they should sit and reach a mutual agreement. But a lot of tour operators — and remember 72% of our tourism comes from Europe through tour operators — are interested to invest because some are already investing in hotels all over Hurghada and Marsa Alam. So I am sure the interest will be there. And we are now building Ras El Hekma Airport on the North Coast, we have El Alamein Airport, so they are preparing for a bigger thing. Hopefully.
Definitely. And that is what everybody is hoping for. Thank you very much for your time.
Thank you.
