Lebanon’s Middle East Airlines officially announced on Sunday that they will only accept payment in cash US dollars once the Central Bank stops subsidizing jet fuel, CEO of Lebanon’s national airline Mohammad El-Hout told the Financial Times daily.
“We will start selling our tickets in fresh dollars,” El-Hout told the Financial Times, separating dollars transferred from abroad, which aren’t subject to the extreme banking restrictions, from the assets in dollars stuck in Lebanon’s banks.
This new decision to reject “local dollars” by the MEA will make traveling severely unaffordable for Lebanese people who do not have a foreign income, the Financial Times said.
“A dollar in the bank is equivalent to 40 percent of a dollar outside Lebanon,” Hout said, justifying MEA’s decision by mentioning that 85 percent of the airline’s expenses are in hard currency.
“If I continue to accept local dollars, I will have all of these dollars in our bank and I’m not able to use them or to transfer them outside,” El-Hout was quoted saying.
“This is not bread, this is travel,” he said, clearly insinuating that it is not indispensable, although traveling does constitute an essential to many in Lebanon, from families needing to visit their breadwinning member working abroad to students in overseas’ universities, and so on.
Traveling has been part of the Lebanese culture for ages, and not just for leisure.
El-Hout added that continuing to accept local dollars threatened the airline’s existence: “I have a choice between continuing the operation of the company, or reaching a certain stage where I cannot continue.”
It’s noteworthy to mention that MEA employees are still getting paid in Lebanese pounds, even though the Lebanese pound has lost 80 percent of its value on the black market.
The contract of MEA employees doesn’t specify that they’re supposed to get paid in dollars. Yet, an MEA employee is being paid in the 1,500LL rate and not in the semi-official exchange rate set by the syndicate of money changers, which is 3,900LL.
Technically, employees at the airline who are supposed to make a salary of $1,000 a month are getting paid 1,500,000 LBP, which is the equivalent of less than $200 today.
As MEA will strictly accept international credit cards for direct sales, travel agents in Lebanon who sell tickets in the local market will still accept local dollars.
"Mr Hout said MEA would shift to fresh dollars when the Central Bank of Lebanon (BdL) stopped subsidising jet fuel, which he said could happen in “maybe one month”. BdL said: “No date has been foreseen to stop.”"
worth pointing out jet fuel is down 30% vs 1 yr ago— Waylon Fairbanks (@WaylonFairbanks) December 20, 2020
El-Hout said MEA will transition to only accepting fresh dollars when the Central Bank stops subsidizing jet fuel, which he said could happen in “maybe one month.”
According to the Financial Times, the Central Bank said: “No date has been foreseen to stop.”
Controversially enough, MEA has been expanding its fleet with the sophisticated A321neo Airbus model, one of which was received in July, adding 2 more three weeks ago.
Six are still expected to be delivered, reportedly this year, from Airbus, one of the world’s largest airliner manufacturers.
At the reception of the first aircraft in July, Mohamad El-Hout told LBCI, “We can’t stop dreaming and improving, despite all hardships.” While the statement holds true in wisdom, the MEA has just shattered the dreams of most Lebanese with their new fresh dollar policy.
For most, there will be no “next journey in one click away” as advertised.
