Interview with Mohammed El-Hout, Chairman & General Director of Middle East Airlines
Mr Chairman, thank you for having Marcopolis in with you today to speak with you about MEA. Your company flies to 33 destinations including locations in the Middle East, Europe and Africa. There has been some mention of new routes to Moscow, Khartoum and Madrid. What are the company´s potential expansion plans both in adding new routes and in adding to its aircraft fleet?
We decided to operate to Khartoum and we are preparing to open up this route by the summer of 2014. Regarding Moscow, we need the facilitation of visas between the two countries or else this plan will not be feasible. At the moment there is no feasibility to open a route to Madrid.
Which would you say out of the 33 destinations is your busiest route?
The busiest routes are to Paris, Saudi Arabia and Dubai.
How many flights a day or a week do you operate to Paris?
We have four flights per day during the summer and three per day during winter and these flights are co-shared with Air France.
You joined SkyTeam in 2012 and became a partner airline in a global alliance; what are some of the benefits of this relatively new partnership? A SkyTeam press release noted that among other advantages for MEA, was the possibility of expanding service to the large Lebanese communities living in the US, Canada and Brazil who will now be able to connect via the major hubs of Paris, CDG and Rome.
Yes, as you said these are great advantages. Being part of SkyTeam or any alliance means more connectivity and there are the miles programs for frequent flyers as well as the possibility of entering the lounges of other companies.
Has it expanded the number of destinations that you can reach?
Yes, we can now reach 1,000 destinations.
So this has been very advantageous to MEA, you didn’t have to consider the partnership at great length and being part of this alliance has given a great deal of synergy to MEA.
Sure. It gives a lot of synergy but we will benefit a lot more from it when we have stability in the country.
Who do you consider to be your top competitors both regionally and elsewhere?
My dear friends Air France! We have a blocked seats code share agreement with them where 50% of the seats are allocated to MEA and 50% to Air France. Here we compete and we make our best to sell our seats. Our other competitors are Gulf carriers. Another competitor is Turkish Airlines because they are now emerging aggressively on the market.
Could you name some of these Gulf carriers?
We compete with all of them, so that means Emirates, flydubai and Jazeera Airways.
We have code share agreements with Saudi Arabian airline, Etihad and Qatar Airways but we also compete with them.
You mentioned earlier the local security situation; how has the contraction of the Lebanese tourism sector affected MEA and particularly your bottom line considering that Beirut is your main hub? Has MEA balanced the scales by adding new routes and services in light of the fact that fewer Gulf tourists are using you to come to Beirut?
We believe in our country and in our capabilities, we have passed through many difficult security and political instability since 2005 with the assassination of the prime minister and the Israeli attack in 2006 and the years that followed. We have to control our costs in order to survive.
During the last year we have added many routes to Iraq. We operate routes to Bagdad, Erbil and Najaf and now we are going to operate to Basra. We are also going to operate routes to Sudan, but this does not compensate for the loss of business class revenue from the Gulf region that is very important to MEA.
So naturally you would like to see the political situation here resolved to be able to add to your bottom line?
Yes of course, but in any case we still saw positive results in 2013.
What do you think of such short hop European discount carriers such as Ryanair and easyJet who have changed the face of intra-euro travel particularly for younger flyers? I have read that MEA has been speaking with management consultants about the possibility of expanding into discount operations similar to these carriers in Europe.
Yes, the study showed that there is potential for a low cost carrier to start with four planes in Lebanon. However we need to wait for a stable situation in order to decide when we should start with this company. Furthermore we are seeing that all low cost carriers in the Arab world are introducing business class. Flydubai is introducing a business class service, flynas also and Jazeera have something that looks “like European business class”. With these changes we have to look seriously before we start such operations.
Going forward into 2014 and over the next several years, what are the company´s expectations in terms of its operations and for the Middle Eastern airline sector overall? What changes are we likely to see in terms of operations, technology used and the size of your fleet?
We have ordered 10 new A320/321 Neo planes and delivery of those will start in 2018. The size of our fleet is currently 17 planes and the average age of our airplanes is 4 years. We decided not to keep an airplane for more than 12 years so they will be out at the heavy check which they call check 12. We are going to maintain a high level of service for our customers. We believe in our country and in our capabilities, we have passed through many difficult security and political instability since 2005 with the assassination of the prime minister and the Israeli attack in 2006 and the years that followed. During the last 11 or so years it has been very difficult but we have continued to make money. We have to control our costs in order to survive. You need to have a lot of cash to be able to survive the bad days so that you can live the good days.
If you were to say in one sentence with just a few words what brand MEA is, what would you say?
ما بيعلى عليها or in English “MEA above all”
Is there anything else that you would like to tell us about MEA that we haven’t covered?
Well, looking towards 2015, MEA is building one of the most developed training and conference centres in the area with a budget of 100 million dollars. We hope that once this centre starts operating it will help in regaining the role of Beirut and MEA in aviation training not only in this area but in the world.
That is very exciting news. Thank you very much for your time Mr Chairman.
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