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Hamdi Chaouk, Director General of Civil Aviation – Lebanon

Hamdi Chaouk, Director General of Civil Aviation – Lebanon

We are accepting the regulations of EASA on environment and we are trying to support it. But at the end of the day the people have to pay the cost of it.

» Interview | Tuesday, August 3, 2010 • Haber Merkezi @ Air News Times

GQ: How the Open Skies impacted Lebanon?

HC: When we opened the sky we looked at the whole thing as a package, it was a strategy for the Civil Aviation. Part of the strategy was restructuring the Civil Aviation to have a proper authority that lead the industry or at least regulate and manage the industry from regulatory point of view. In the same time we approached the airline. We asked for a restructuring program and a future strategy. The airline did not have anything, was making loses and was afraid of the liberalization. So we have built the strategy together with them and in cooperation with international companies and institutions. We went ahead in parallel, we helped airline to restructure the company and at the same time we opened the sky. The airline had to buy a new fleet, create better services and restructure completely from which the noncore businesses elements of the MEA were separated and completely privatized. Now the MEA is a private company. Then we liberalized the market including 5th freedom without reciprocity. So I do not have to negotiate any more bilateral agreements. We started, immediately 13 new international airlines came to approach Beirut Airport, after that we saw a birth of a new charter and a new business jet. We had to open completely new terminal for general aviation and charters what became almost 50% of overall airport operations. We saw a development which was really surprising – the annual growth of passenger was almost 25%. MEA was able to compete, the second year they started to breakeven and the third year they made operational profit. In addition to that the liberalization created new jobs and new investments at the airport because almost all was privatized: from ground handling, catering to the parking. That resulted in doubling the income of the airport in three years. The growth of passengers was exceptional even during the not stable times. Reassuming, the liberalization had positive impact on MEA because they had to start competing and changed their thinking, the airport finally got positive results and we opened the visa for almost all nationalities. Until today, after eight years now, there is no one single negative sign as a result of the liberalization.


GQ: What kind of monopoly will it lose and how this will affect the MEA?

HC: In 1992, the country at that time was coming out of the recession and did not have any money, government wanted to rebuild the country and therefore could not support MEA financially. That is why they gave them monopoly but what does it mean? You have bilateral agreements with other countries so you cannot stop their airlines coming in. When we opened the sky it has changed but we kept the same conditions on the birth of any local airline that will finish next year. But MEA is fighting because they would like to keep the same conditions. We have said no so far and hopefully the politicians will not interfere with that.


GQ: Would you like the Low Cost Carriers or other airlines to be based in Beirut?

HC: If MEA cannot serve certain demand I will allow anybody to serve. 


GQ:: But do you think that LCC will come?

HC: Yes, of course there will be either a Lebanese one or if Lebanon cannot invest in a new carrier then we can see Air Arabia or anybody else to operate as LCC based in Beirut. Of course MEA with 13 aircrafts cannot serve all, it is physically impossible. Furthermore I would not like to see MEA to grow any faster than that because I prefer see them more profitable than having additional shares in the industry.


GQ:: Do you thing that it will be in favor of MEA to have a fully liberalized environment?

HC: I think it will be a healthy pressure on MEA to create a mechanism that drives the efficiency forward but I am not worried about MEA at all because it is small, taking only the profitable routes, they are making wise decisions on where to fly and the pricing policy. That is why I have to keep pressure on them and find new LCC coming in to Lebanon for competition on the market. So again, I am not worrying about MEA, of course they may not make the same profit anymore but it is up to them how to play with their routes, yields and participation in alliances. All I am trying to do is create around them boundaries with proper criteria to drive some sort of competition forces within until they change their structure and move forward.


GQ: Should the new company be Lebanese owned?

HC: No, anybody can open a company in Lebanon.

GQ:: There is a lot of discussion about environment, how the DG is supporting this topic in Lebanon?

HC: We are accepting the regulations of EASA on environment and we are trying to support it. But at the end of the day the people have to pay the cost of it. As far as the regulation is concerned, we are working with ICAO – we are part of the Civil Aviation Committee at the Arab area because they are limiting the percentage of CO2, we are working globally on this issue and we are working with them on the same level.


GQ: Do you have a close relation with the European Commission on the safety regulations too?

HC: Yes, we have already a horizontal agreement and we were to sign a full agreement but because of some political changes we had to postpone it. But after all, we are still kind to sign the new air service agreement. We are joining the EC in almost all their projects and activities.


GQ:: What other initiatives is the DG taking regarding the air transport in Lebanon?

HC: Hopefully we are going into an extension program. I would like to see an airport without any fees. Of course I will have a lot of resistance but I think people in my country will benefit more. Somehow you are getting the benefits somewhere else and that is one big pocket anyway. Secondly, I hope to see a stability in the region. So a new airport, different structure for the airlines with introduction of different operation philosophies and opening of new airports that operates cargo and completely opening of the market.

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