State-owned Middle East Airlines (MEA) is to be restructured in a bid to reduce its reliance on government funds. Lebanon's finance minister Fuad Siniora says the country's Central Bank, which controls more than 99% of MEA, cannot afford to support the carrier indefinitely.
The World Bank's private sector arm, International Finance Corp, is investigating the airline for the Lebanese Government, and will recommend ways in which it might be restructured or privatised.
MEA chairman Mohammed Hout has already warned that the carrier is overstaffed. MEA employs 4,000 people but operates only nine aircraft (two Airbus A310-300s, three A310-200s, two A320s and two A321s). Local analysts say it needs to shed up to half this number to become efficient.
MEA suffered massive disruption to its services and loss of aircraft and equipment during 15 years of warfare in Lebanon, which ended in 1990, and has underperformed financially for many years. It expects to report a $45-47 million loss for 2000, bringing accumulated losses since 1991 to more than $400 million.
Hout has also complained to the government about its decision to open up Beirut International Airport to other carriers, claiming the move will further damage the flag carrier.
Source: Flight International
