KLM Royal Dutch Airlines announced a shocking news that it has decided to temporarily suspend flights to Cairo effective on 8 January 2017 as a result of “economic reasons”, said Al-Watan, an Egyptian independent newspaper.
KLM said in a statement published on its website, “The devaluation of the Egyptian pound and the decision of the Central Bank of Egypt to impose restrictions on the transfer of foreign currency out of Egypt have a negative impact on results of KLM.”
The statement continued, “The final flight to Cairo (for the foreseeable future) will depart from Amsterdam on 6 January 2017, with the final flight returning to Amsterdam on 7 January 2017,” as stated on KLM site.
Egypt’s economic situation, and particularly restrictions on the transfer of foreign currency, sparked protest from airlines earlier this year. KLM’s latest decision appears to be a sign that some restrictions remain invalid for business although the Egyptian government has responded previously by easing some restrictions.
Egypt’s tourism is one of the major sources of foreign currency in the country, that suffers from an economic crisis due to the shortage of foreign currency. The number of tourists fell 40% in the first quarter of 2016.
Both the British and Russian governments have banned their airlines from traveling to Sharm AL-Sheikh for security concerns after the bombing of a Russian passenger jet in October 2015 killing all 224 people on board. Sinai Province- a group affiliated with the Islamic State- has claimed their responsibility for downing the Russian plane.
In addition, Egypt has received a major blow in May when an EgyptAir plane crashed into the Mediterranean, killing all 66 people on board. The cause of the crash is still unknown.
In the five years since, Egypt’s foreign reserves have gone down more than 50 %, from $36 billion to $17.546 billion as of last month.