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RIYADH: Lebanon’s flag carrier Middle East Airlines — wholly owned by the central bank, Banque du Liban — plans to launch a low-cost subsidiary to serve destinations in the EU and the Middle East in what would be a welcome addition to the sector.

Amid an economy in freefall, soaring ticket prices, and competition from Hungarian budget carrier Wizz Air Abu Dhabi’s limited but cheaper flights, analysts told Arab News how the proposal could still have a positive impact on the country’s aviation sector.

Jassem Ajaka, an economist and university professor, believes the MEA has “kind of a monopoly in terms of direct flights.”

However, negotiations with the International Monetary Fund include liberalizing various sectors, which could see increased competition for the company if new competitors enter the market.

Ajaka sees the low-cost subsidiary as a strategic play, adding: “Launching an LCC (low-cost carrier) during this monopoly scene is a step to keep its position, especially as many customers suffer from high ticket prices and look for indirect flights through cheaper airlines. This could help MEA recollect those travelers.”

For Lebanese expatriates like Ziad Fino, a project coordinator at business school HEC Paris who left the country during the 2019 crisis, soaring airfares have turned family visits into a costly ordeal. “I used to visit Lebanon at least twice a year — once in the summer and again during the holidays,” he told Arab News in an interview. “But now, with ticket prices skyrocketing, I’ve had to cut back to maybe once a year, if I’m lucky.”

MEA’s fares have become a significant burden.

“A round-trip ticket from Riyadh to Beirut during peak season can cost over $1,000,” said Roger Hadchity, a project manager at Riyadh-based Blueprint Middle East, a commercial fit-out and refurbishment contractor, who left Lebanon for ������Ƶ.

“We’re forced to look for alternatives, like connecting flights through other Gulf hubs, but even those options are getting pricier,” he added.

But how can MEA’s subsidiary operate at genuinely lower costs? Ajaka said: “MEA is already an established airline, so it could rely on one type of airplane and benefit from existing human resources. The new LCC could also use yield management to maximize revenues from every trip.”

Lebanon’s broken economy poses a steep challenge. “It’s so hard to launch and operate an LCC amid high inflation,” the economist admitted. “But it could work if the chain is autonomous and self-sufficient — selling tickets in fresh USD cash or through fresh USD credit cards, using cheap fuel, and implementing yield management,” he noted.

Any operation in Lebanon is directly affected by the security in the country, and as Ajaka affirmed, nothing can operate in an armed conflict area.

“In case of Israeli aggression, the project cannot proceed. Even if the airport isn’t targeted, rising insurance fees would affect profits,” he added.

In July, it was announced that the new airline was set to be launched within two years and serve destinations in the EU and the Middle East.

Speaking to Arab News, MEA’s Public Relations Manager Rima Mekkaoui said that concrete preparations for the airline may not begin until winter 2027. When asked for more details, Mekkaoui confirmed that was all the information currently available.

Regulatory hurdles and global partnerships

Kamil Al-Awadhi, the International Air Transport Association’s regional vice president for Africa and the Middle East, outlined the certifications that any new LCC would need to become operational.

“The IATA Operational Safety Audit Program is IATA’s internationally recognized and accepted evaluation system designed to assess the operational management and control systems of an airline,” he explained, noting that such IATA-specific certifications are not compulsory for aviation firms to obtain before being operational.

The top official explained that if an airline wants to become an IATA member, it must become IOSA registered and must remain registered to maintain membership. 

While IATA membership is not compulsory for an airline to operate, it has its perks as the association offers support to both LCCs and full-service carriers.

“Becoming an IATA member airline offers numerous benefits, including enhanced credibility, access to a global network, reduced costs through streamlined operations, and a powerful voice in industry advocacy,” Al-Awadhi said.

“IATA membership also facilitates industry change, promotes safety standards, and provides access to financial services and business intelligence,” adding that non-IATA airlines face limitations including barriers to joining alliances and integrating into the wider aviation ecosystem, especially without IOSA certification.

Regional LCCs and Lebanon’s uphill battle

Lebanon’s plan to launch a budget airline comes as nearly every neighboring country has already established its own successful low-cost carrier, reshaping regional travel with ultra-affordable fares.

Wizz Air Abu Dhabi is a growing ultra-low-cost company in the region, expanding with flights from Beirut.

Flydubai serves as Dubai’s budget-friendly alternative to Emirates, while ������Ƶ’s flynas operates flights to over 70 destinations. Kuwait’s Jazeera Airways and Oman’s Salam Air dominate budget travel in the Levant and Gulf. These airlines thrive on cost efficiency, high-frequency routes, and digital-first booking — something MEA has struggled with due to Lebanon’s economic constraints.

Unlike Gulf carriers, which benefit from state-backed stability and open-skies policies, MEA faces hyperinflation, fuel shortages, and a collapsing currency.

Fleet expansion vs. economic reality

MEA has nine new aircraft on order, including long-range Airbus A321XLRs to open African routes, but delivery delays — some jets were due in 2023 — highlight broader industry struggles. Meanwhile, Beirut’s airport, strained beyond its 6-million-passenger capacity, saw a post-ceasefire surge, handling 560,050 travelers in May alone.

To cope, MEA is pushing for a $400 million to $500 million second terminal via a public-private partnership, promising advanced, passport-free processing. But similar plans were scrapped in 2023 over corruption claims, and Lebanon’s instability may deter investors.

In June, Lebanese Prime Minister Nawaf Salam revealed plans for a second international airport in Lebanon.

Public Works and Transport Minister Fayez Rasamny confirmed during a speech on Aug. 19 that “reactivating the René Moawad Airport in Qlayaat is a fundamental pillar for stimulating commercial and tourist activity in the North (of Lebanon),” clarifying that “the airport’s feasibility study has been completed and the project is now awaiting the executive steps for its revival.”

Wizz Air’s shadow

Wizz Air’s arrival has exposed MEA’s pricing vulnerability, but its limited routes leave room for competition — if MEA can undercut its own mainline fares without cannibalizing revenue.

With Lebanon’s financial system in shambles and political risks lingering, MEA’s gamble hinges on two bets: that travelers will trust a state-linked budget carrier, and that Lebanon’s economy won’t ground it before takeoff.  As Hadchity put it: “If travel stays this expensive, more of us will drift away.”

RIYADH: Investor confidence is rising in Middle East startups, from proptech funding rounds to strategic bets in the growing gaming sector. 

These moves reflect a broader regional trend: supporting ventures that harness technology to tackle real-world challenges — ranging from home ownership and food security to cultural entertainment— while aligning with Saudi Vision 2030 and the UAE’s economic diversification goals.

Holo raises $22m in Series A round

In one of the Gulf Cooperation Council’s largest Series A rounds this year, UAE-based fintech Holo has raised $22 million to expand its tech-enabled home-buying platform.

According to a press release, the round was led by ������Ƶ’s Impact46, with participation from Abu Dhabi’s Mubadala, Rua Growth Fund, anb seed, and MoreThan Capital, alongside returning investors Salica Oryx Fund and Dubai Future District Fund.

The funding comes amid growth in regional real estate markets, with the UAE projected to reach $217 billion by 2030 and ������Ƶ’s market expected to hit $310 billion. Holo plans to leverage its profitable UAE base to scale into the high-growth Saudi market.

Michael Hunter and Arran Summerhill, co-founders of Holo, said: “At Holo, we’ve always believed that buying a home shouldn’t be complicated. With this raise, we’re not only scaling across borders but also scaling trust, simplicity, and access to homeownership.” 

They added: “Our profitability in the UAE has given us the strength and confidence to invest ambitiously in high-growth markets like ������Ƶ.”

The founders noted that momentum around homeownership and digital transformation is accelerating as the Kingdom advances toward Vision 2030. “The vision is regional, and with backing from world-class investors, we’re in a prime position to keep raising the bar for how home-buying should work — faster, smarter, and built around the customer.”

Basmah Al-Sinaidi, managing partner at Impact46, said: “Holo is bringing much-needed clarity to a process that’s long been opaque. By streamlining access to lenders and giving users full control of their home financing journey, they’re reshaping how people buy homes across the region.” 

Ali Al-Mheiri, executive director of UAE Diversified Assets at Mubadala, added: “Our investment in Holo comes from our belief in the strength of its vision, leadership, and ability to reshape how people navigate the home-buying journey.”

Maalexi secures $20m credit facility

Maalexi, a B2B food and agri-trade platform, has secured a Shariah-compliant credit facility of up to $20 million from Amwal Capital Partners.

The initial $5 million tranche will be used to scale operations and integrate thousands of small and medium-sized enterprises into the platform, bolstering food security in the UAE and ������Ƶ, according to a statement.

The facility is structured as a tech-enabled securitization, collateralized against Maalexi’s inventory and receivables. 

Maalexi CEO Azam Pasha said: “This facility is more than capital — it is a catalyst to enhance our capabilities and help us build resilient and intelligent food supply chains that are driven by speed, transparency, and trust.” 

He added: “Combined with the capital support of partners like Amwal Capital, these innovations are redefining how food is digitally procured, stored, and distributed — reinforcing food security across the UAE, ������Ƶ, and the wider GCC.”

Sharif Eid, head of private credit at Amwal Capital Partners, said: “Maalexi’s proprietary technology stack, deep market linkages, and robust operational controls set a new benchmark for de-risking and scaling agri-trade.”

Saudi gaming ecosystem

The Saudi gaming ecosystem is experiencing a surge of activity, reflecting the Kingdom’s strategic focus on the sector under Vision 2030.

Impact46 committed $53 million to Kammelna in its largest investment to date. The studio behind the digitized version of the Saudi card game Baloot has achieved over 6 million downloads and boasts 1 million monthly active users. Abdulaziz Al-Omran, founder and CEO of Impact46, called the deal a turning point not just for Saudi gaming, but for what it means to invest in culturally grounded, scalable IP.

Kammelna’s CEO Bader Al-Zamil said the partnership will help build more games that carry the spirit of our culture to players everywhere. Separately, indie studio Starvania raised $1.1 million from Merak Capital and Impact46. According to a press release, the funding will enhance production capabilities for PC and console games and support recruitment of top talent.  The studio, founded by Meaad Aflah and Muslih Al-Zahrani, gained recognition with its Arabian mythology-inspired game Bahamut and the Waqwaq Tree.