Gunter Endres/LONDON
MIDDLE EAST AIRLINES' (MEA) increasingly desperate quest, for a large capital injection to fund a fleet update, appears to be nearing an end, after an extraordinary shareholders meeting approved the move. The recommendation is expected to be ratified, at a General Assembly, called for 17 April.
Shareholders have approved a $225 million capital injection which, says senior vice-president planning and economics Mansour Bardawil, is the minimum needed to finance a wide-ranging restructuring programme, focused heavily on the replacement of an aging and inappropriate aircraft fleet.
MEA's major shareholder, Intra Investment, whose 62.5% holding is largely controlled by the Lebanese Government and Bank of Lebanon (together holding 47%), and the Kuwaiti Government (30%), has expressed its willingness to provide the extra capital, Bardawil confirms, but the door has been left open for contributions from other shareholders, including Air France.
The airline's fleet consists of three Boeing 747-200Bs (mostly leased out), eight hushkitted Boeing 707-320Cs, and five leased Airbus A310s. The three 747s will be retained and MEA wants to phase out the 707s by about March 1997. Leases on the five A310s will expire in 1997 and cannot be renewed, as all have been sold for cargo conversion, but they are expected to be replaced by a mix of six A310-200s and -300s.
According to Bardawil, the 707s will be replaced by five smaller aircraft, with a decision to be made between the Boeing 737-800 and Airbus A320. If it takes the Boeing route, MEA would acquire five 737-400s on an interim operating lease, pending the availability of the 737-800s. By 1998 the projected fleet, would consist of three 747-200Bs, six A310-200/300s and either five 737-800s, or an equal number of A320-200s.
Other elements of the restructuring plan, devised by the new management team installed in September, involve a 20-25% reduction in its 4,000-plus workforce, the elimination of unprofitable routes - Madrid, Tunis and Freetown have already been cut - and an aggressive expansion into what Bardawil calls "niche" markets, particularly in areas where there are large populations of ex-patriate Lebanese.
Countries providing opportunities are Australia, Brazil, Canada and the USA. MEA already serves Sydney and Sao Paulo, but still has to regain its licence to the USA, withdrawn following the bombing of the US Marines headquarters in Beirut in the Reagan era.
Source: Flight International
