Lebanese airline MEA records 20% drop in passenger volume amid war impact

Insurance cover is challenging as the company continues to operate in a conflict zone, its chairman says

A downward trend in tourist arrivals has led to a 15-20 per cent drop in MEA's total passenger volume since the beginning of the war in Gaza. Reuters

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Lebanon’s Middle East Airlines (MEA) aims to keep flying despite the tough conditions of operating in a war zone that has shrunk its business and slashed passenger volumes by 20 per cent since the beginning of the Israel-Gaza war in October 7.

With the Gaza war leading to increased fighting between Lebanon's Hezbollah militants and Israeli forces on the border, state-owned MEA has been forced to park some of its planes in Turkey and face reductions in its aircraft insurance cover.

“If you see the challenges that Middle East Airlines has, we wish we had similar problems to what other airlines are facing," Mohamad El Hout, MEA chairman, told The National in Dubai.

"We are in the midst of the most difficult and complicated security and political situations in Lebanon and the whole region.

“We have difficulties getting aircraft insurance against wars."

The airline has faced geopolitical risk in the past, most notably in 2006 when an Israeli air strike destroyed three runways at Beirut International Airport.

There are now fears that an escalation in fighting between Israel and Hezbollah might make it the deadliest since the 2006 war.

Hezbollah said it will not cease its attacks until Israel ends its siege on the Gaza Strip, where more than 37,600 Palestinians have been killed.

The conflict has dampened demand for travel to Beirut, MEA's hub and a popular tourism destination before the Gaza war.

The number of inbound visitors to Lebanon dropped 13.52 per cent year-on-year in the first quarter of this year, reaching 237,633, mainly due to a decline in the number of European and North American visitors, Blominvest Bank, Lebanon's largest lender, said last month, citing Ministry of Tourism data.

"This drop is largely due to the conflict between Israel and Gaza and the Lebanese southern border. Indeed, many countries urge their citizens not to travel to Lebanon due to high risks of armed conflicts," the bank said.

The number of European tourists dropped by 17.2 per cent year-on-year to 89,640 in the first quarter, followed by a 14.6 per cent decline in the number of North American tourists to 38,180 and a decrease of 11.9 per cent in the number of Arab tourists to 73,934.

International visitor spending in Lebanon is expected to decline to $6.5 billion this year, a drop of 19.4 per cent on 2023 and 82.6 per cent on 2019 before the pandemic, according to data by the World Travel and Tourism Council (WTTC).

Mirroring the downward trend in tourist arrivals, MEA has recorded a 15 per cent to 20 per cent drop in total passenger volume from October 7 to date.

Patterns of leisure travel to Lebanon have changed during the war, with the airline carrying fewer Gulf tourists, particularly from Saudi Arabia, Kuwait and Qatar, Mr El Hout said.

Lebanon relies on high-spending Gulf tourists and on western visitors, particularly during the peak summer season.

“Number one right now is visitors from Iraq, some from Egypt and fewer from Jordan … we hope more from Kuwait and Qatar will come back but they haven’t yet,” he said.

The airline now mainly carries Lebanese expats living in diaspora and returning home for holidays.

“However, despite all this, the airline is still able to continue operations and keep up with industry developments and we are taking delivery of new aircraft," the airline's chairman said.

MEA took delivery of an owned Airbus A321 Neo jet two months ago from an existing plane order.

“We will proceed with our plan to take delivery of a large number of planes in 2026 and 2027. So we will have nine aircraft on the way,” Mr El Hout said.

The nearly 80 year-old airline operates an all-Airbus fleet that includes the A321 Neo narrow-bodies and the bigger A330 wide-body models.

“Of course we’re going to shoulder losses but the airline has the financial resources to overcome this phase and once peace returns to Gaza and southern Lebanon, all these losses can be recouped easily,” he said.

The outlook for the second half of the year will depend on how the summer season shapes up and the direction the conflict takes.

“It all depends on the [geopolitical] situation,” Mr El Hout said.

A major risk to the airline during the war is a repeat of the 2006 Israeli bombing of Beirut International Airport, which forced it to close for the duration of the 33-day conflict.

The Israeli air force justified the strike by claiming the site was being used by Hezbollah to receive weapons shipments.

Concerns flared this week after UK newspaper The Telegraph published a report on Sunday that Hezbollah was smuggling and stockpiling weapons at the Beirut airport, citing anonymous “whistle-blowers”.

The report was denied hours later by Lebanon's caretaker Transport Minister Ali Hamieh, who dismissed the article as baseless and badly sourced, and immediately called on the media to tour the site.

Lebanese authorities hosted an open tour of the airport on Monday, inviting press and diplomats to observe the compound in response to the allegations.

The Telegraph report has led to fears that the claims could be used as a justification for Israel to bomb the airport.