Egypt and Russia agree to resume tourism after 2015 attack hiatus

3 billion a year in additional Egyptian revenue expected after resumption of Russian tourism
Atalayar_turismo Egipto

REUTERS/AMR ABDALLAH  -   Tourists at the Red Sea resort of Sharm el-Sheikh, south of Cairo, Egypt 6 February 2021

Egypt and Russia will resume all flights between the two countries, suspended for more than five years following the October 2015 plane bombing that left 224 people, mostly Russian tourists, dead. In a statement, the Egyptian presidency announced the agreement reached on the 23rd, although it did not specify when the resumption of operations would take place. Some flights were restored in 2017 and 2018, but not to the Red Sea tourist destinations of Hurghada and Sharm el-Sheikh in South Sinai, which are now included in the pact (more data points to Egypt resuming regular flights to Moscow).

Goldman Sachs said a return of Russian tourism activity to pre-2015 levels could boost Egypt's tourism revenues by more than $3bn annually (around 0.75% of GDP), and this is likely to happen gradually due to the ongoing COVID-19 pandemic.

Atalayar _Turismo Egipto
PHOTO/ Suliman el-Oteify/Egyptian Prime Minister's Office via AP - This photo released by the prime minister's office shows the tail of the Metrojet plane that crashed in Hassana, Egypt, Saturday Oct. 31, 2015

Direct flights from Russia to Egypt were suspended in October 2015 following the crash of Metrojet No. 9268 flying from the coastal city of Hurghada to St Petersburg. The resumption of flights is seen as a major boost to the recovery prospects of Egypt's tourism sector, which was hit by the COVID-19 pandemic, after the height of the tourism boom in 2014, according to Goldman Sachs. Russia suspended flights to Egypt when an Airbus A321 of Russian airline Kogalymavia, flying from Egypt to St Petersburg, was bombed while flying over the Sinai Peninsula on 31 October 2015. Following that catastrophe, one of the worst in the history of Russian aviation, Putin assured that flights with Egypt would not resume until the Egyptian authorities guaranteed 100 per cent safety for Russian tourists.

The agreement was reached in a telephone call between Egyptian President Abdel Fattah al-Sisi and his Russian counterpart Vladimir Putin, according to a statement from the Egyptian presidency. A meeting in which they also discussed "the collaboration of the two countries in the entire tourism sector". The resumption of flights to these tourist destinations is due, according to the statement, to an improvement in "security and comfort criteria" at Egyptian airports to ensure the well-being of all passengers.

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REUTERS/ANTON VAGANOV - Ceremony to open a memorial commemorating the victims of the Metrojet Airbus A321 crash in Egypt's Sinai Peninsula in 2015, in St Petersburg, Russia October 28, 2017

Russian tourists used to account for a third of all tourists arriving in Egypt, but this number has dropped significantly since the ban on direct flights was imposed, according to the investment bank's estimates.

Goldman Sachs explained that during the ten years prior to the Metrojet crash, Russian tourism to Egypt was growing at a rapid pace, and peaked in 2014, with more than 3.1 million Russian tourists entering the country, accounting for about a third of the total number of tourists arriving in Egypt that year.

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PHOTO/AFP - Tourists and masked guides and local caretakers pose together for a group photo, keeping their distance from each other, at the entrance to the ancient Temple of Luxor in the southern Egyptian city of Luxor

In the wake of the crash, the number of tourists from Russia dropped drastically and fares have not recovered since, and the main reason for this is that the Russian Federation imposed a ban on all direct flights to Egypt, pending a review and modification of airport security procedures. According to Russian press reports, improved security standards now allow flights to resume and the resumption of tourism to Hurghada and Sharm el-Sheikh in Sinai is being discussed.

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REUTERS/BREDAN McDERMID - Goldman Sachs' New York Stock Exchange Trading Post

The bank said that "the average income of each tourist in Egypt over the past three years amounted to $1,000, and therefore the possibility of Russian tourism returning to pre-2015 levels, which exceeded 3 million tourists annually, means strengthening the current account by around $3bn a year". It also gives a good boost to GDP growth prospects, given that the economy relies heavily on the tourism industry, which accounts for one in seven jobs in the Egyptian economy, according to official data in Egypt.

It is worth noting that there is relative uncertainty regarding the timing of the resumption of Russian tourism, as it is likely to be linked to the evolution of the pandemic, including the success of vaccination and vaccine production in Russia and Egypt. For the Egyptian president, this agreement will strengthen bilateral relations and the movement of individuals between Egypt and Russia, sowing a seed of hope for the country's economic recovery.