Lois Jones
Struggling Lebanese flag carrier Middle East Airlines has named a new seven-man board of directors, after the former board was ousted amid corruption allegations.
MEA's outgoing 11-man board has been replaced by one headed by Mohammed Hout, the director of real estate affairs at Banque du Liban. The bank holds 99.7 per cent of the carrier's stock and has taken responsibility for the airline's payroll in recent months. The board's six other members include former Air France president Christian Blanc and Lebanese businessmen, engineers and lawyers.
The former board was forced to resign amid charges of hefty kickbacks involved in the five-year lease of three Airbus A310-200s from Singapore Aircraft Leasing Enterprise. The new board has renegotiated the deal, reportedly reducing the cost by US$5 million to $34 million. MEAis not prepared to comment on the allegations.
The new board is charged with turning around MEA, which expects to report a loss of US$53 million for 1997, even though one industry source says the carrier's books value three Boeing 747s worth $35 million each at some $80 million apiece.
MEA has suffered from political interference since the civil war ended in 1990. 'Politicians simply got jobs for their friends at the airline,' says an industry source. The airline is also over-staffed, employing 4,500 people of whom some 2,200 are surplus. 'How can you lay off people who risked their lives to defend MEA's building during the war?' the source asks.
'Money isn't really the problem - MEAneeds someone to clear the place out and put the right people in key slots,' the source says.
Source: Airline Business
