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Mon 7 Mar 2016 10:38 AM

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Emirates working with Egyptian officials to resolve profit repatriation issue

Foreign airlines have struggled to repatriate earnings due to foreign currency shortages in Egypt

Emirates working with Egyptian officials to resolve profit repatriation issue

Egypt's civil aviation ministry has said the central bank has reached an agreement over payments to foreign airlines, including Emirates, who have struggled to repatriate earnings due to foreign currency shortages.

Import-dependent Egypt has faced a worsening US dollar shortage since the 2011 uprising and subsequent turmoil drove away foreign investors and tourists.

The crash of a Russian airliner over Egypt's Sinai in late October, killing all 224 people aboard, has further hit tourism in the Red Sea, and with it Egypt's dollar earnings.

Last week Air France-KLM said it had been unable to repatriate any earnings since October and was owed more than EGP100 million Egyptian pounds ($12.8m) but the civil aviation ministry said that airlines would be paid what they are owed in foreign currency over "the coming period."

British Airways had also decided to only allow tickets to be purchased using credit cards in order to avoid further problems, while other airlines threatened to suspend ticket sales altogether.

Dubai-based Emirates has also faced issues, with reports in Egyptian media suggesting that $10 million of its revenues has been held in the country. The same report, in Arabic outlet Almal News, quoted the head of the Tourism Advisory Council’s aviation committee Gehad Al Ghazaly as saying the airline had threatened to cut 75% of its flights to Egypt over the issue.

The airline, however, denied that it would reduce its operations and said it was working to resolve the issue with aviation officials.

“Just like other foreign carriers operating in Egypt, Emirates continues to face difficulties in repatriating foreign funds to its centre of operations in Dubai. We are working closely with the relevant authorities to address the issue and reach a long-term resolution which is in the best interests of both parties," an Emirates spokesperson said.

"Egypt has been part of Emirates’ route network since 1986 and we remain strongly committed to the Egyptian market. Our operations to Egypt have steadily grown with increases in both frequency and capacity to match commercial demand. In January 2016, Emirates added three new weekly flights, taking the total number of flights serving Cairo to 17 each week.”

In an announcement this week, the issue appears to have been resolved, with Egyptian authorities agreeing to a staggered repatriation of funds over a period of thee to six months, in accordance with an agreement reached between the airlines and the Central Bank of Egypt.

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