The long awaited privatization of the Lebanese carrier, Middle East Airlines (MEA), seems to have been put on ice once again, after Naguib Mikati, Lebanese minister of public works and transport, opted to have another go at curbing the airline’s financial losses, before finally putting it up for sale.
While details of Mikati’s plans are sketchy, it is clear that in order to cut the airline’s current annual losses, of about $45 million, the airline is expected to slash its 4,300-strong staff. According to a report in the Daily Star, such moves would be directed mainly towards the ground service and maintenance staff, working at the Beirut International Airport.
MEA is expected to try to repost its personnel in affiliated companies, able to absorb additional staff. Otherwise, the Lebanese government is likely to offer employees 24 or 36 months of salary in return for their resignation. The World Bank has already agreed to grant the government a soft loan to finance the layoffs.
Proposed schemes for restructure the ailing airline are to be presented to the International Finance Corporation — a private-sector arm of the World Bank. For its part, the IFC has suggested that MEA reduces the scope of its operations, and focus entirely on the Middle East region and specific destinations in Europe. MEA currently flies to 20 destinations.
Since taking over 99 percent of MEA in 1996, Lebanon’s central bank has spent about $400 million in attempts to cover annual losses. In 2000, such losses equaled $40 million. — (Albawaba-MEBG)
© 2001 Mena Report (www.menareport.com)