MEA will only accept fresh Dollars if Central bank ends fuel subsidy, Hout

Muhammad Al-Hout, MEA chairman


Muhammad Al-Hout, MEA chairman

The Chairman of the Board of the Middle East Airlines ( MEA) , Lebanon’s national airline Muhammad Al-Hout, said that the airline will stop accepting payments in US dollars from deposits in local banks.

He pointed out, in an interview with the British “Financial Times” newspaper, that we “will start selling our tickets for the fresh dollars” only, dollars transferred from abroad and free of bank restrictions.

He explained that the reason is that “the dollar in local banks is equivalent to 40% of the fresh dollar l ” explaining that “continuing to accept local dollars is not commercially feasible because 85% of the airline company’s expenses are in hard currency.” He also stressed that “the Middle East Airlines will start using the fresh dollar when the Banque du Liban stops subsidizing jet fuel, which could happen within one month.”

Al-Hout emphasized that “continuing to accept the local dollar threatens the existence of the airline. I have to chose between continuing to operate the company, or to reach a certain stage in which I cannot continue our operations .”

Dollars withdrawn from local are exchanged at 3900 Lebanese pounds but Fresh dollars in the parallel market are traded at around 8500 to 9000 Lebanese pounds. Lebanese can no longer access their dollar account they can only withdraw their US dollars in Lebanese pounds ,they are being forced to accept between 50 to 60 % loss on their money as part of the haircut resulting from the Ponzi scheme of the central bank .

No one will tell you where the deposits in US dollars have gone . Up till October 2019 The Lebanese were using dollars and Lebanese pounds to pay for their purchases. The dollar was fixed at about 1500 Lebanese pounds . Also in October 2019 there was about 156 billion US dollars deposited in The Lebanese banks and the Central bank had reserves of about 22 billion including the gold reserves , The Central bank has since taken control of all the dollar deposits of Lebanese banks and despite this it is claiming that it has enough reserves to subsidize fuel , flour and medicine for 2 months only .

There is a huge concern that since the Iranian backed Hezbollah militant group controls all the branches of government ( The presidency, the government and the parliament ) and all its border points it may have taken control of the the dollars to help Iran and Syria, because they are hurting economically due to the US sanctions.

Hezbollah also has reportedly been taking advantage of the Central bank subsidies by smuggling subsidized fuel, flour and medicine to Syria .