airxliban
Posts: 4288
Joined: Wed Oct 01, 2003 12:14 pm

MEA To Post $15m Profit By End Of 2003

Tue Nov 11, 2003 10:33 am

This from the daily star. Maybe some of you have seen it before. No mention of adding any new aircraft or any specific destinations. However, it looks like we can expect to see some codesharing. Perhaps in the summer they'll annouce a couple new destinations.

Does anyone know...BA for instance, when they annouce the summer schedule?

-Air Liban

MEA flying high with increased profits
Chairman confident of future success
National carrier has been boosted by purchase of 6 new Airbus planes

Osama Habib
Daily Star staff

The chairman of Middle East Airlines (MEA), Mohammed Hout, projected Wednesday that his company will generate an operating profit of $15 million at the end of 2003, thanks to the high tourist season and a restructuring plan.
MEA, which has been owned by the Central Bank since 1996, recorded a $3 million profit in 2002, the first such achievement in almost 25 years.
Hout expects profits to surge in the future even further if the tourist season remains strong and the regional situation remains relatively stable.
But Hout did not want to project the profits of MEA in 2004, although he did not rule out impressive results.
According to Hout, MEA’s image has been further boosted with the purchase of six new Airbus planes and the lease of three more. The newly acquired fleet has a seating capacity 20 percent higher than older aircraft and the entire fleet has been equipped with state-of-the-art individual video screens.
Hout, who was appointed by the Central Bank as head of the airline three years ago, said he had the biggest challenge in his career: containing the losses and turning the company into a profitable institution. He added that he is confident that MEA can return to its former glory.
MEA suffered a loss of $87 million in 1997. This prompted the new board of directors to review the situation and determine why the company was losing so much money,” Hout told The Daily Star.
“One of the first things the board of directors did was to cancel the long haul flights of MEA to Brazil and Australia because these routes were too costly.”
Hout cut the number of destinations from 45 to 19 and shut down several offices overseas.
MEA also formed an alliance with Air France and uses Paris as a hub for the national carrier, to fly to 180 destinations around the world, including the US and South America, and this “network redesign has led to a better utilization of the MEA fleet.”
MEA reduced the number of active planes from 13 to nine. The management scrapped all the Boeing 707 airplanes and leased nine Airbus planes three years ago, leading to “a saving of $25 million a year.”
In addition, MEA saved another $5 million by renegotiating maintenance contracts, and the purchase of fuel.
Negotiating contracts and cutting the number of flight routes may have been the easier part of Hout’s scheme, but the big question in the minds of many skeptics was whether the chairman had the courage to do the unthinkable and reduce the number of the airline’s staff.
“The idea of asking people to go home wasn’t well received in Lebanon,” he said, adding that no one even considered laying off staff during the civil war, because state owned firms did not suffer financial losses as they are now.
But as peace returned to Lebanon, MEA was left with the fact that more than 4,500 people were actually on the company’s payroll.
After tense negotiations with representatives of MEA’s workforce, many employees finally accepted end of service offers that the company provided in return for their resignation.
As a result, over 1,200 MEA personnel left their posts, after the Central Bank agreed to pay around $100 million in compensation, allowing MEA to save another $25 million annually.
On future plans, Hout said MEA will be considering new alliances in an attempt to open new routes and expand its profit horizons.

PARIS, FRANCE...THE BEIRUT OF EUROPE.
 
MEA310
Posts: 633
Joined: Wed Feb 06, 2002 8:52 pm

RE: MEA To Post $15m Profit By End Of 2003

Wed Nov 12, 2003 2:58 am

Great news!Thanks to many factors,this profit was made possible.The tourist attraction played a major role this past summer;if any of you visited Lebanon lately,you could easily tell.Hopefully the winter season works out well for MEA,in preparation for the summer of 2004 & an expected joint with SkyTeam.

MEA310
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