MEA keeps exclusivity

Airline's operating profits at $40 million in 2011

The Middle East Airlines (MEA) has been awarded exclusive monopoly as national passenger carrier for 12 more years. The Cabinet extended, on Wednesday (September 5) MEA’s exclusivity contract, which was to expire on September 14.

Lebanon granted MEA exclusivity in 1969 as the country’s only commercial airline. The original 20-year deal was extended until 2012.

Mazen Bsat, owner of local travel agency Med Airways, and former owner of a small airline, said he is against MEA’s exclusivity: “Lebanon is the only country that still grants exclusivity to airlines. In the UAE there are at least five airline companies, the same goes for other Gulf countries.”

In 2001, the government decided to institute and open skies policy. Latest figures show that the share of foreign airlines in the local aviation market exceeds 65 percent. Bsat said any new local carrier will not take from MEA’s share but from foreign companies’ market share.

According to the proposal forwarded by MEA, local companies are incapable of offering the same services as MEA for the same price. It said compliance with global security and safety requirements is too expensive and requires high skills. MEA’s operating profits dropped to $40 million in 2011, from $90 million in 2010.

Jean Zailaa, senior director at Nakhal travel agency, said monopoly guarantees the continuity of the national carrier. “In such tough times, protecting MEA is important in order to preserve the company which is so far the only company able to undertake risks,” Zailaa said. He said MEA keeps flying out of the country even when foreign airlines stop due to heightened security risks.

Reported by Rania Ghanem