It is well known that governments are the primary monopolists under most economic systems. This practice, which contradicts the principles of a free-market economy, may be somewhat acceptable based on the rationale of protecting certain sensitive sectors in capitalist states. For instance, it might be logical not to liberalise sectors like military, nuclear, or high-tech industries to avoid the chaos of unregulated production, which could be devastating. Leading capitalist nations, of course, apply this principle—the USA in space technology, Britain in military production, and many other advanced and even developing countries, each according to their specialisation.
However, the civil aviation industry in most parts of the world, by the end of the 1970s, emerged from under the state’s protective monopoly—or, more accurately, it was freed from the control of politicians and left to interact logically with market mechanisms in response to supply and demand. Civil aviation is, after all, a service provided to the general public as part of their ‘assumed’ right to travel and freedom of movement. It is an industry of immense complexity and interconnectedness, what economists call a network industry, a unique type that governments find difficult to manage with their centralised decision-making or to develop in response to market mechanisms.
It is indeed striking to note that a high-income European citizen can fly from Madrid, at the far west of their continent, to Istanbul, nearly at its far east, for a tenth of what a low-income Egyptian might pay just to travel to neighbouring Libya, for example. This is truly an unfair paradox and a hindrance to the citizen’s right to move and travel across geographical boundaries, solely due to the state’s monopoly over managing Egypt’s civil aviation—a reality that contradicts the global trend of liberalising this vital economic activity.
The economic liberalisation of civil aviation worldwide came as part of a series of moves aimed at lifting restrictions on this sector after decision-makers realised that politicians could no longer serve the public interest in this industry. These trends were not exclusive to any one country or imposed by anyone but were a global shift in which Asians outpaced their European and American competitors. Prices were high, and occupancy rates were below 50%. Now, with competition among airlines, the number of passengers has indeed increased, flights have multiplied, prices have dropped, and global occupancy rates have risen to 74%, according to 2003 civil aviation statistics. Yet, control over the infrastructure of this industry has remained in the hands of governments—and why not?
Since the beginning of this liberalisation trend in civil aviation, what is now known as low-cost carriers or ‘LCCs’ has emerged. These are limited services offered by airlines to passengers to reduce costs for the general public. The market share of this type of airline has reached 30% of the global industry, thanks to their popularity among both the working class and the wealthy. After all, who wants to pay multiples of the cost just for the sake of a glamorous flight attendant in a short skirt, gazing into their eyes and softly asking how much they enjoyed the service? Such things have become relics of an impractical past, and it is expected that this type of airline will capture more than 50% of the market in the coming years.
The monopoly of the Ministry of Civil Aviation over this vital sector in Egypt seems to have done more harm than good. Airfare to and from Egypt is among the most exorbitant in the world, and the service on our planes, while commendable, is only slightly better than that of East Delta buses. Criticism of this sector is recorded in most international travel guides. This is not to mention the crucial aspect of liberalising this sector in Egypt: air freight and exports. The delays, bureaucracy, and exorbitant costs of this sector in Egypt are indeed major obstacles for many Egyptian goods, especially perishable food items, in reaching foreign consumers, despite the government’s constant promises to stand by Egyptian exporters.
This article is originally published by AlBorsa in Arabic and later AI-translated by South Push.