I have a dictionary that I am using to build my Egyptian Arabic vocabulary, Egyptian Colloquial Arabic Vocabulary by Matthew Aldrich, and it mentions that for addressing someone with more respect/familiarity you can use a kunya e.g. abu khaled rather than ya 'ustaz Mohammed. I want to better understand when to use each since this distinction doesn't exist in English, nor in the other languages I have studied: Spanish and Portuguese.
If I was visiting a friend in Egypt would I use the kunya rather than 'ustaz/madam to address his parents for respect? Which is more common to use to respectfully address adults/elders in Egyptian Arabic. When greeting an adult/elder on the street in Egypt is it more common to use ya 'ustaz/ya madam or a kunya if the person is someone you already know?
It depends. Both of kunya and Ustaz/madam are used in the Egyptian culture nowadays, and both of them show respect. However, when you use Kunya for old people, this can imply some familiarity between both the adresser and the adressee. Ironically, "Kunya" is used sometimes to show unfamiliarity too. This is, say, when you want to address your friend's father and you have no idea about his first name, or you forget it and you are too embarrassed to ask.