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EGYPTAIR: In mid-2002 Egyptian Aviation Minister Ahmed Shafiq announced the formation of EgyptAir Holding Co., headed by Abdel Fattah Kato, as part of a major restructuring of the airline under new management following the firing of Mohamed Fahim Rayan, who headed the carrier for 21 years. A reorganization was to create separate companies responsible for airline operations, ground services, operations and maintenance, airfreight, air services and tourism, and duty-free shops.
Late in the year EgyptAir chose the ATR 42-500 for the startup of a domestic shuttle service connecting Cairo with Hurghada, Sharm el-Sheik and Luxor. Six aircraft were taken on lease from ATR, including crews. This March the airline purchased seven A330-200s from Airbus with deliveries scheduled to begin in June 2004. It will operate them mainly on routes within the Middle East and to Europe. In April Rockwell Collins was selected to provide avionics and inflight entertainment equipment for five new A320-200s, deliveries of which are to begin this year.
EL AL ISRAEL AIRLINES: On the verge of a long-delayed privatization in late May, El Al continued to struggle under a $900 million mountain of debt and heavy losses aggravated by the collapse of travel to and from Israel due to terrorism, the Palestinian intifada and the Iraq war. First-quarter net loss hit $33.5 million, up from $13.5 million a year earlier. The carrier's $23.7 million loss for 2002 was a sharp improvement from its $85.2 million 2001 loss, but management blamed the steep first-quarter decline on evaporation of the travel stream, which reached a trough in March when traffic fell 48% because of the coming war in Iraq. As a result, revenue dropped 9.3% in the quarter to $228.5 million. Cash flow was a negative $35.8 million versus a negative $14.5 million a year earlier.
Despite pre-privatization verbal turbulence, El Al Chairman Michael Levi declared, "We are getting ready to operate El Al as a public company." Eyal Gabbai, director of the Government Companies Authority, said shares were to be issued on the Tel Aviv Stock Exchange in mid-June upon approval of El Al's prospectus by the Israel Securities Authority. The company most likely will continue to be saddled with a ban on flights on the Sabbath and Jewish holidays, a painful commercial...