War and political instability has forced Lebanese carrier Middle East Airlines (MEA) to postpone its partial privatisation until at least 2008.
The recent Israeli-Hezbollah conflict, which forced MEA to temporarily operate out of Damascus in Syria and Larnaca in Cyprus, is over, but continued tensions in the region convinced the government that this is not the right time for privatisation.
"The financial institutions which made the evaluation have suggested postponing it to a better time," says MEA chairman Mohamad El-Hout, adding that privatisation is likely to be pushed back to 2008.
The political situation has also killed MEA's plans to launch a regional airline, Phoenician Express, with Syrian Arab Airlines, although this too could be revived. Plans to join the SkyTeam alliance as an associate member in 2007 could also be affected, says El-Hout.
The delay in the privatisation - 25% was to be made available to the private sector - is disappointing because the airline has been producing sustained profits. Even after losing $43 million during the few weeks of the Arab-Israeli conflict last summer, El-Hout says MEA will still end 2006 with a profit of around $15 million. MEA is virtually wholly owned by the Central Bank of Lebanon.
El-Hout confirms the airline is finalising an agreement to take eight new Airbus aircraft to add more frequencies and to add services to Qatar, Iraq and, possibly, Russia. The new aircraft - four A330-200s and four A319s - will be delivered in 2008 and 2009.
The privatisation of Middle East Airlines is likely to be pushed back to 2008
Read interviews with Sheikh-Talal Al-Sabah from Kuwait Airways Corporation and Nachaat Numir from Syrian Arab Airlines.
Source: Airline Business
