BEIRUT (Reuters) – The head of Lebanon’s airline said on Sunday that at some point the carrier would have to demand payment for tickets purchased in Lebanon using “new dollars”, or money transferred recently not subject to restrictions imposed from financial crisis.
Chairman Mohamad El-Hout, Middle East Airlines (MEA) did not say when this rule would be introduced, but the warning will raise concerns for dollar holders who are virtually locked out of dollar accounts from the end of 2019.
The authorities have a dollar withdrawal of about $ 500 per month, with a few exceptions, and have put an exchange rate of around 3,900 Lebanese pounds, effectively reducing the value of these investments as the street rate unofficial now over 8,000. Prior to the crisis, the free-use rate was 1,500.
Buying airline tickets was one way to use those dollars held in local banks, in a country with a large diaspora and where hard cash has become scarce.
Dollars transferred to Lebanon in recent months, known as “new dollars”, are held in new accounts and are not subject to withdrawal or other restrictions.
“If the company wants to ensure sustainability, we will reach a time when we need to sell in ‘new dollars’,” Hout told Reuters, adding that MEA would have to do this because costs are rising. carrier for fuel and other items were in dollars.
He said the other option was to stop the carrier, which is mostly owned by the central bank.
He also told the Lebanese television channel that prices had fallen, by around 40%, once payments were in “new dollars”.
Many people in Lebanon, who for decades were proud of their open economy and as a regional banking center, now rely on financial support from their families abroad to help them get among bank restrictions and high prices.
Written by Edmund Blair, edited by Louise Heavens