Egypt’s civil aviation ministry has announced a new agreement for foreign currency payments to international airlines, who have been unable to repatriate earnings due to banking restrictions, Reuters reports.
Last week Air France-KLM publicly announced that operations were becoming 'unsustainable' due to the delays in releasing dollars from Egypt to cover essential costs such as salaries, aircraft leasing and jet fuel, which all must be paid in dollars.
The ministry has confirmed that payments will be made 'over the coming period', and in the case of British Airways, to be paid fifty percent of what is owed and the rest in instalments, said Gehad Al Ghazali, an adviser to the tourism minister.
British Airways to transfer 50 per cent of what it is owed in one go with the rest to be paid in instalments, while Air France-KLM would receive 30 million Egyptian pounds (Dh14 million, $3.83 million) to , out of a total 120 million pounds owed, Al Ghazali told Saudi-owned television Al Arabiya.
Egypt has been facing a foreign currency crisis since the 2011 uprising and subsequent turmoil which drove away foreign investors and tourists.
The downing of a Russian airliner over Egypt’s Sinai in late October, killing all 224 people aboard, has debilitated tourism in the Red Sea, a key source of foreign currency.
The Egyptian pound has faced devaluation but the central bank is reluctant to devalue for fear of further fuelling double-digit inflation and has instead introduced austerity measures which have put pressure on manufacturing and trade and made it harder for foreign investors to repatriate revenues.
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