Lebanese national flag carrier Middle East Airlines (MEA) announced on Sunday that it would only accept payments in US dollars starting from Tuesday, June 1. Originally, the move was to have taken place on June 8, but has been brought forward by the Lebanese Central Bank. The bank owns 99% of the airline.
85% of MEAs expenses are in dollars. Photo: Anna Zvereva via Wikimedia
Previously, travel agents in the Lebanese capital were telling their clients that MEA tickets would need to be paid for in dollars starting from June 8. Now people planning to travel are having to scramble to get dollars out of the bank or pay inflated prices to exchange shops for dollars to pay for tickets.
Having to purchase MEA tickets in dollars only applies to tickets bought in Lebanon and would now be based on a central bank benchmark dollar rate set to be launched this month, according to the Lebanese English language news outlet The961.
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This has been coming for some time
The move by MEA to only accept payment in dollars has been coming for some time. MEA Chairman Mohamad El-Hout told the Daily Star that it was on the cards back in December when he said,
“We have no other choice but to charge in dollars once the Central Bank ends its subsidy program, or else we will be forced to close down. We are already losing a lot of money because we are charging at a dollar rate of LL3,900 (Lebanese pounds), and this proved to be very bad for our business.”
MEA Chairman Mohamad El-Hout. Photo: MEA
Most of MEAs expenses are paid in dollars
Around 85% of all MEAs expenses are paid in dollars and include the leasing of aircraft, jet fuel, aircraft maintenance, and landing fees at international airports. When speaking about why the airline only wanted to accept ticket payments in dollars, Hout added,
“Nearly all the international airlines that have offices in Lebanon are charging in dollars and won’t accept bankers’ checks or Lebanese pound, and this did not affect the volume of business.”
Before MEA’s decision to only accept dollars, people could pay for their tickets in local currency or by check. Now, it will mean higher ticket prices, making air travel all but impossible for most of the population.
Nobody knows the value of the local currency
The truth of the matter is that nobody knows how much the Lebanese pound is worth anymore. At the moment, Lebanon has four vastly different rates at which Lebanese pounds can be exchanged for dollars.
In 1997 the Lebanese pound was pegged to the dollar at LBP 1,500 = $1.00. In 2019 Lebanon suffered an economic crisis that saw the Lebanese pound lose between 80% to 90% of its value against the dollar.
From Tuesday, people in Lebanon have to pay in dollars for MEA tickets. Photo: Getty Images
If you look at it from MEAs perspective, they really have no option other than charging in dollars as you can’t run a business when the money you are accepting fluctuates so wildly.
To sum up the situation, regular Lebanese workers are trying to navigate a minefield of multiple exchange rates. They are paying the price for the countries political elite’s incompetence and corruption.
If you live in Lebanon, how do you feel about having to pay for tickets in dollars? Please tell us your thoughts on the matter in the comments.
Article Source simpleflying.com