ECONOMY

Middle East Airlines may bid for Cyprus carrier

Lebanon?s Middle East Airlines, once the leading carrier in the region, said on Monday it may bid for a stake in Cyprus Airways Ltd as the unprofitable company?s state owner seeks a turnaround plan.

?We feel there is real potential for us and we are studying it seriously,? MEA Chairman Mohamad el-Hout said in a telephone interview, adding that Beirut-based company is in the early stages of considering the case for an investment. No one could be reached at Cyprus Airways following calls to its offices.

Cyprus?s Cabinet said last Wednesday that it would consider offers for a stake in Cyprus Airways, which lost 29.3 million euros in the first half of 2011. Governments are becoming reluctant to prop up airlines as Europe?s debt crisis forces the deepest cost cuts in a generation, with Hungarian national carrier Malev Zrt folding on February 3, a week after state-supported Spanair SA of Barcelona also ceased flying.

?European airlines have a very serious crisis and during a crisis you sometimes get a bargain,? said Abdul Wahab Teffaha, secretary-general of the Arab Air Carrier?s Organization, in an interview. ?In principle it?s a good step toward consolidation, which is better for the industry as it?s highly fragmented.? [Bloomberg]