Aridi pledges to renew MEA's exclusivity rights

01 March 2011

BEIRUT: Lebanon’s next government will renew Middle East Airline’s exclusivity rights when the flag-carrier airline’s government-sanctioned monopoly expires in 2012, caretaker Public Works and Transport Minister Ghazi Aridi said Monday.

“Whether or not I am minister of Public Works and Transport in the next government, MEA’s exclusivity rights will endure,” Aridi said.

Aridi is considered very likely to remain a minister in the next Cabinet which will be formed by Prime Minister-designate Najib Mikati. It is also expected that Aridi will stay on as a minister of public works and transport.

Aridi’s comments came during a joint news conference with MEA chairman Mohammad al-Hout, who signed a partnership agreement with a 13-member strong airlines alliance, SkyTeam.

“MEA is the mother of all national institutions [in Lebanon], so let’s not give in to greed but rather think about protecting MEA and strengthening it,” Aridi added.

The minister was apparently responding to some calls to set up other private Lebanese airlines that would compete with MEA.

It is rumored that one of the current ministers is lobbying to set up another private airline.

Lebanon granted MEA exclusive rights as the country’s only commercial passenger airline in 1969, a year after Israel ravaged its fleet during an air raid. The deal was originally a 20-year contract, which later was extended to 2012.

But in the last three years some high-profile politicians, including former Finance Minister Jihad Azour, have suggested that the government should liberalize the industry.

MEA recorded a loss of over $7 million last month, the largest loss the company has incurred since Israel’s war on Lebanon in 2006, when Lebanon’s commercial airspace came to a virtual standstill. MEA posted a $35 million loss that year.

Early in 2010, Hout predicted that MEA’s profits would fall by 40 percent after reaping profits of more than $100 million in 2009.

Hout believes that partnering with SkyTeam will boost revenues by 20 percent. MEA’s membership is set to become active in 2012.

SkyTeam Alliance is one of the three largest international airline cooperative agreements, which allow for airlines to extend the reach of their services well beyond the destinations where they are physically present, by pooling services and resources between partners.

SkyTeam’s network of airline partners will enable MEA flights to link with 12,500 daily flights, 898 destinations in 169 countries.

MEA currently flies to 31 destinations in the Middle East, West Africa and Europe. It maintains a partnership with Air France, which allows MEA flyers to arrive at airports that the Lebanese airline does not directly fly to, notably in North America.

The SkyTeam membership will also grant the Lebanese airline’s premium class customers access to 420 airport lounges. Subscribers to MEA’s frequent flier program, Cedar Miles, will also be able to use awarded air-miles for flights with partner airlines.

SkyTeam partners currently include Alitalia, AirEuropa, KLM, Delta Airlines and nine other airlines.

The alliance forged its first two agreements in the Middle East North Africa region this year by bringing MEA and Saudi Arabian Airlines into its fold. Both airlines are set to activate their memberships in 2012.

“This agreement represents a crowning ceremony for the movement towards development that [MEA] presses on with,” said Aridi.

Hout gave assurances that in spite of the vacuum in governing ranks due to the collapse of government last month, MEA operations have been “normal.”