(Ecofin Agency) - The Egyptian government announced it has granted a subordinated loan of EGP2 billion (€116 million) to support the national carrier Egyptair. According to the finance minister Mohamed Maait, the repayment will be made once the carrier has reached an operating rate equivalent to 80% of its operating volume in 2019.

This aid is aimed at supporting the national airline's cash flow, which has seen its revenues drastically reduced since the suspension of regular traffic at all Egyptian airports on 19 March due to the Covid-19 pandemic.

According to the latest International Air Transport Association (IATA) forecast, the number of passengers in Egypt could drop by 9.5 million in 2020, which corresponds to a loss of revenue of around €1.52 million. In such a scenario, the country's GDP could decline by €2.2 billion, and 205,560 people could lose their jobs.

Private sector airlines have been granted a six-month moratorium by the Egyptian government for the payment of utility bills and payments will resume in October. The measure, which also affects hotels, is part of the government's efforts to contain the impact of the ongoing coronavirus pandemic on the tourism sector.