Middle East Airlines (MEA), Lebanon’s national carrier, firmed up an earlier preliminary agreement to buy ten Airbus SAS single aisle aircraft from the plane manufacturer's neo family for US$1.05bn at average current list prices.
"An aircraft offering fuel burn saving, high reliability as well as a modern and comfortable cabin is a sound investment in anyone’s books,'' MEA Chairman-Director General, Mohamad El Hout, said in a statement.
To date, Airbus has recorded 8,900 orders for aircraft from the A320 family and has delivered over 5,300 globally. The A320neo will deliver fuel savings of 15 percent and an additional flight distance of 500 nautical miles (950 km), or the ability to carry two tonnes more payload at a given range.
MEA scrapped plans for a partial initial public offering (IPO) because of unfavourable market conditions, Lebanon's Central Bank Governor Riad Salameh told Arabian Business in an interview in July. The IPO would have seen the listing of 25 percent of the carrier on the Beirut Stock Exchange, raising about US$250m.
However domestic political turmoil coupled with the debt crisis in Europe and the regional popular uprising that toppled four leaders in the Arab world in 2011 have deterred those plans. MEA, owned by the Central Bank of Lebanon which rescued it from bankruptcy in 1996, has a fleet of 18 Airbus SAS planes (A330-200s, A321s and A320s) and flies to more than 38 destinations.
Beirut-based MEA, which was founded in 1945 and was once a leading carrier in the Arab world, reported a 44 percent drop in profit in 2011. The operator saw its profits decline to US$40m in 2011 from about US$90m in 2010 due to a rise in the prices of fuel, increase in the cost of employee salaries and political instability in the region, the Daily Star reported.