BEST IN SERVICE

Lebanon 2018 | TRANSPORT | INTERVIEW

TBY talks to Mohamad A. El-Hout, Chairman & Director General of Middle East Airlines-Air Liban (MEA), on serving as Lebanon's flagship carrier, expanding its fleet, and training human talent in Lebanon.

Mohamad A. El-Hout
BIOGRAPHY
Mohamad A. El-Hout has served as Middle East Airlines-Air Liban’s Chairman and Director General for 20 years. Prior to this role, he was Head of the Real Estate and Financial Assets Department at the Central Bank of Lebanon. From 2004-2007, he served as President of the Executive Committee of the Arab Air Carriers Organization and has been a member of the committee since 2010. In 2017, El-Hout also rejoined the Board of Governors of the International Air Transport Association. He holds an MBA from American University of Beirut.

What strategy have you followed to maintain MEA as the pride of Lebanon?

Any airline company must have the ability to compete, and this necessitates cost control. We should maximize our staff productivity and decrease our unit cost. On the other hand, we must provide our customers with the best service. MEA has chosen a niche market where people are looking for the best service both on ground and onboard. Therefore, 20% of our seats are business class, a high percentage compared to other airlines in the world. We also have invested in the best entertainment system and lounges for our passengers. The average age of our fleet is five to six years, and we do not keep any aircraft for more than 12 years. MEA provides the best flight schedules and frequencies, focusing on our regional network and on destinations that Lebanon has economic ties with. We have a 37% market share at Rafic Hariri International Airport in Beirut and currently fly to 33 destinations. Our net profit for 2017 was around USD95 million, compared to USD94 million in 2016. But our operating result is less for 2017 because of decreasing yields, increasing fuel prices, and so forth. This has been offset by the sale of two aircraft.

To what extent have you seen an increase in the number of passengers traveling with MEA?

MEA had a YoY increase of around 8.5% in 2017. With our new fleet, we will have an increased passenger capacity because the A321 is larger than the A320. However, our A321 aircraft are being equipped to the highest standards with only 160 seats, instead of the maximum capacity of 230 seats. We are keeping the planes spacious and comfortable. These new aircraft will consist of 28 business class seats and 132 economy class seats.

What impact is the MEA Training and Conference Center expected to have in Lebanon?

Having a conference center in Beirut is important for business activities. The center is open to everybody; it is not only for airlines. At the moment, we do not have many customers coming from outside Lebanon for training, but once the political situation improves, we expect to attract more clients. However, a training center is needed in Beirut because Lebanon has an advantage in terms of its human talent. This is a state-of-the-art center, equipped with the most advanced simulators for both pilots and cabin crew training. It is also one of the best centers for aircraft engineering and maintenance training. We will also be offering training for commercial activities, cargo handling, and so forth.

Does MEA have any other projects coming up in 2018 and beyond?

The construction of our new maintenance facility will begin at the end of 2019 and should be ready in mid to late 2021. We are demolishing all our existing buildings that are not eco-friendly, and our new green building will be completed by 2019.

What are MEA's main business objectives in 2018?

The main objective is to maintain our profits. We have been distributing profits to our shareholders for the last 10 years hoping to continue this way. We are aiming to distribute one dollar per share in 2018, meaning USD55 million per year out of sales of USD800 million. There are a lot of hubs in the region with good connectivity and movement of traffic between the Gulf and Europe, but this is not the basis of our network; it is complementary to our network. MEA is a SkyTeam member, but we are open to operating with a variety of partners. For example, we just signed a new code share agreement with Kuwait Airways, and in 2017 we signed the same deal with Turkish Airlines. We also have code-share agreements with other airlines, such as Qatar Airways, Etihad, and Air Canada.