AIR TRANSPORT
Lebanese flag-carrier, Middle
cautious and highly profitable.
chairman, Mohamad El-Hout,
BEIRUT FORCE...
D
uring the early years of Syria’s civil war,
Middle East Airlines (MEA), the flag-
carrier of neighbouring Lebanon,
benefited from an uncomfortable spike in
demand due to its proximity to the battleground.
With Syrian airspace all but closed to civilian
traffic, most refugees who could afford airline
tickets drove 110km from Damascus to Beirut
before boarding their flights.
Syrian footfall in Lebanon has subsided in
recent years as the war-torn state hobbles
towards some semblance of normality.
At home, flag-carrier Syrian Arab Airlines is
plotting to re-build its network with new Russian
aircraft that are not subject to western sanctions.
Abroad, a handful of international airlines have
tentative plans to resume operations in Damascus.
Although falling cross-border demand might
seem like bad news for MEA, Mohamad El-Hout,
the airline’s long-standing chairman, actually
wants the trend to continue.
“Out of more than eight million [passengers
per year at Beirut’s Rafic Hariri International
Airport], you have a maximum 800,000 Syrians
using the airport,” he noted.
Millions of tourists
“During the time when Syria was stable, you had
around 300,000 Syrians who were using Beirut
Airport. So we hope that the situation will go
better in Syria.
“If we lose 500,000 passengers at the airport as
a whole, for sure we will benefit from millions
and millions of tourists and passengers – because
of the stability in the area.”
El-Hout’s optimism is borne out by
government statistics: the number of people
passing through Beirut Airport grew by 7.3% last
year as violence in Syria abated. On August 16,
2019, the gateway handled 22,800 departing
passengers – its highest ever daily figure.
Asked why MEA’s market share at the airport
is only about 35% – well below the home
advantage of most Middle Eastern carriers – El-
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East Airlines (MEA), is a rare
breed in the Arab aviation
market: small, commercially
Martin Rivers talked to
about his winning formula.
Ground-breaking: MEA will become the first operator of the A321XLR in 2023.
Hout said the figure reflects Lebanon’s
commitment to fully deregulated skies.
The country’s policy was underscored in July,
when Ryanair, Europe’s largest low-cost carrier,
gained approval for a thrice-weekly service to Beirut
from Paphos in Cyprus. Chief financial officer, Neil
Sorahan, later hinted that more Beirut links are
planned – likely under the operating licence of
subsidiary Malta Air, which was created to extend
Ryanair’s reach in the Middle East and north Africa.
Franco-Dutch low-cost carrier, Transavia, also
operates flights to Beirut from Amsterdam, Paris
Orly and Lyon, while Spain’s Vueling serves the
Lebanese capital from Barcelona.
“We are competing with 40 carriers… and we
are happy with this number,” El-Hout affirmed.
“We are keeping the competition, so [ticket]
prices are going down.
“However, we have made it clear [to other
countries] that we need reciprocity. If somebody
is allowed to come with nine flights per day to
Beirut, then at least we should be allowed to have
three flights per day [to their airport].”
The chairman would not identify which countries
are flouting their obligations under Lebanon’s open-
skies treaties. But, in a previous interview with
Arabian Aerospace in 2015, he indicated that the
UAE is one of the worst offenders.
“The minister of transport is taking care of
this,” El-Hout added. “Others are asking for
additional flights and he’s telling them, ‘You are
welcome, but Middle East Airlines should be
granted flights [as well] otherwise it will not be
open skies. It will be a closed market’.”
Besides the competitive headwinds, management
have another reason to favour conservative growth.
Their caution is an acknowledgement of the
mistakes made in the 1990s, when MEA
expanded aggressively in a bid to capitalise on
Lebanon’s post-war recovery.
That strategy involved chasing after members
of the diaspora with commercially dubious
routes such as Sydney (Australia) and Sao Paulo
(Brazil). MEA’s headcount ballooned at the same
time as the government quelled political dissent
by dishing out jobs at the flag-carrier.
Better path
It was El-Hout’s appointment in 1998 – one year
after MEA posted its heaviest annual loss of $87
million – that put the company on a better path.
The former central banker’s willingness to cut
routes, retrench staff and re-negotiate contracts,
delivered swift results, returning MEA to the
black in 2002. It has stayed there ever since,
weathering successive waves of economic and
security unrest: the war in Iraq, the global
financial crisis, the Arab Spring uprisings, and
repeated military confrontations with Israel.
“We don’t do aggressive growth. We do
sustainable growth. And the results we are
achieving are great,” El-Hout smiled. “I prefer to

keep sustainable growth and to be able to absorb
shocks in the area, if we have any shocks.”
Predictably, the airline’s risk-aversion has
given rise to a small but stable point-to-point
network with almost no connecting traffic.
About a dozen routes are operated to Europe,
including last year’s addition of Madrid (Spain).
Fifteen points are served in the Middle East,
north Africa and the Caucasus. And three in west
Africa: Abidjan (Cote d’Ivoire); Accra (Ghana);
and Lagos (Nigeria).
Although Lebanon President, Michel Aoun, said
in September that MEA wants to resume Sydney
flights, El-Hout made no mention of resurrecting
the Australian connection. The airline’s head of
commercial strategy and alliances, Walid Abillama,
also downplayed the prospect in a recent interview
with Executive Magazine.
Instead, management are focused on building
capacity in existing markets, while cautiously
exploring new opportunities in Africa. Their fleet
plan reflects this by prioritising extra seats over
the addition of extra aircraft.
MEA’s fleet currently comprises 13 Airbus A320
narrow-bodies and five A330-200 wide-bodies. That
should inch up to 19 or 20 units by the middle of
the next decade, with firm orders in place for 11
A321neos, four A321XLRs and four A330-900neos.
Nine of the A321neos will arrive next year,
followed by two in 2021. The wide-bodies are also
scheduled for delivery in 2021, while MEA will
become the first operator of the A321XLR in 2023.
The narrow-body contract was originally split
between 126-seat A320neos and 150-seat
A321neos, but management revised it to cover
only the stretched variant.
“There is demand [to fill the A321neo] and
crew commonality [is an advantage],” El-Hout
said of the decision. “Having lower load factors
on three or four aircraft is much easier than
changing planes [based on the route]. For a small
fleet, it’s better to have one aircraft type.”
Another change came at the Paris Air Show in
June, when MEA was confirmed as the launch
customer of the A321XLR – an extended range
version capable of flying 4,700nm. All four units
will be delivered to Beirut in 2023.
Game-changer
El-Hout described the A321XLR as a “game-
changer” for the airline, primarily because of its
ability to replace wide-bodies on African routes.
“We can increase the frequencies to [existing
routes in west] Africa,” the chairman noted.
“Also, a smaller aircraft [than a wide-body] will
give us the flexibility to operate thinner routes to
Africa that we cannot operate now, like Kinshasa
[in the Democratic Republic of the Congo] or
Abuja [in Nigeria].
“And it opens for us possibilities to go to the
east, if needed in the future, to India.”
Management are still deciding whether the
NATIONAL CARRIERS
‘IfWesomebody
need reciprocity.
is allowed
to come with nine flights
per day to Beirut,
then at least we should
be allowed to have
three flights per day
to their airport.
MOHAMAD EL-HOUT ’
other A321s will be the LR variant, which has a
range of up to 4,000nm thanks to its extra fuel
tanks. MEA does not need the LR for its own
network, El-Hout said, but it usually favours
high-specification models due to “their residual
value and the possibility of re-selling them”.
The airline aims to have an average fleet age of
five or six years, meaning that most of its aircraft
are sold in their 10th or 11th year.
Future-proofing was also a consideration in
the wide-body order, though MEA’s ability to
fully exploit its A330neos is far from certain. “We
are taking the new -900neo with the highest
maximum take-off weight, the 251t version,” El-
Hout noted. “It has longer range [than the other
variants], although we are not going to use it…
[We ordered it] in case we are allowed again to fly
to the United States.”
MEA was banned from America in 1985 after
the hijacking of TWA Flight 847 – a three-day
intercontinental ordeal that killed one US
serviceman and left dozens of passengers held
hostage in Lebanon for a fortnight. America
blamed Lebanese militant group, Hezbollah, for
the terror attack. It denied responsibility.
Three decades after Lebanon’s civil war ended,
MEA is still counting the cost of its troubled past.
Though there can be no guarantee of happier
times ahead, El-Hout’s leadership has given the
airline the best possible hope of a long and
profitable future. ■
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