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Liberalization and Strategic Change in Air Transport: An Examination of Current and Future Variations in Tourist Traffic to and from Egypt Resulting from Policy Changes at EgyptAir

Author

Listed:
  • John F. O'Connell

    (Department of Air Transport, Building 115, Cranfield University, Cranfield, Bedfordshire MK43 0AL, UK)

  • David Warnock-Smith

    (Division of Transport and Logistics and Tourism, Queensgate, Huddersfield, West Yorkshire HD1 3DH, UK)

Abstract

The purpose of this study is to explore the impact of changes in EgyptAir's corporate strategy on its role and significance in relation to the Egyptian tourism sector. In-depth open interviews with top-level personnel were combined with a before–after time-series analysis of key market data in order to identify any early effects of EgyptAir's strategic changes on important international markets for inbound and outbound tourism. The study's major finding is that EgyptAir has taken some significant steps to target higher-yielding tourist passengers travelling from Egypt to Europe, Asia and North America and vice versa by fortifying its position at Cairo, improving its overall service offering and joining the world's largest strategic airline alliance (Star Alliance). Some early gains have been noted in these markets for EgyptAir, while at the same time an avoidance strategy has been noted in relation to lower-yield package holiday-makers who, despite forming a growing share of total demand, are already served by a highly competitive mix of foreign charter and scheduled airlines. Tourist numbers were found to increase after the strategic changes at EgyptAir. This increase was either facilitated directly by EgyptAir or indirectly as other carriers took advantage of the additional opportunities to serve markets that were dominated or neglected by EgyptAir prior to its air policy induced change of strategic direction. The general push towards liberalization in the wider Middle East region also partly led to these strategic changes.

Suggested Citation

  • John F. O'Connell & David Warnock-Smith, 2012. "Liberalization and Strategic Change in Air Transport: An Examination of Current and Future Variations in Tourist Traffic to and from Egypt Resulting from Policy Changes at EgyptAir," Tourism Economics, , vol. 18(4), pages 845-870, August.
    • Handle: RePEc:sae:toueco:v:18:y:2012:i:4:p:845-870
    DOI: 10.5367/te.2012.0142
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    References listed on IDEAS

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    1. Forsyth, Peter, 2006. "Martin Kunz Memorial Lecture. Tourism benefits and aviation policy," Journal of Air Transport Management, Elsevier, vol. 12(1), pages 3-13.
    2. Clive L. Morley, 2003. "Impacts of International Airline Alliances on Tourism," Tourism Economics, , vol. 9(1), pages 31-51, March.
    3. Lohmann, Guilherme & Albers, Sascha & Koch, Benjamin & Pavlovich, Kathryn, 2009. "From hub to tourist destination – An explorative study of Singapore and Dubai's aviation-based transformation," Journal of Air Transport Management, Elsevier, vol. 15(5), pages 205-211.
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    2. Pagliara, Francesca & La Pietra, Andrea & Gomez, Juan & Manuel Vassallo, José, 2015. "High Speed Rail and the tourism market: Evidence from the Madrid case study," Transport Policy, Elsevier, vol. 37(C), pages 187-194.
    3. Heinz, Stephan & O’Connell, John F., 2013. "Air transport in Africa: toward sustainable business models for African airlines," Journal of Transport Geography, Elsevier, vol. 31(C), pages 72-83.
    4. Tchouamou Njoya, Eric, 2020. "An analysis of the tourism and wider economic impacts of price-reducing reforms in air transport services in Egypt," Research in Transportation Economics, Elsevier, vol. 79(C).

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