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Oxford Business Group - Lebanon flying high

Oxford Business Group - Lebanon Volume 199 - 1st of September 2009

One of Lebanon's most important sectors – tourism – is enjoying its best year on record, thanks in no small part to the country's improved transport links, and in particular the record-breaking performance of Beirut's airport.

Tourism is already one of the driving forces of the Lebanese economy – contributing just under 10% to GDP – and is a sector that the country hopes will continue to provide further employment and revenue.

One of the key pieces in Lebanon's transport infrastructure network is Beirut Rafik Hariri International Airport (BRHIA), the country's main entry point for overseas tourists that is also becoming important as a cargo hub.

According to data released by airport authorities in August, BRHIA looks set for another record year, with nearly 2.7m passengers passing through its terminals in the first seven months of 2009, up by 28.9% compared to the same period last year. Meanwhile, the number of planes touching down and taking off also increased by 31.4%, with the airport handling 31,100 flights.

BRHIA also recorded an 11.3% increase in the volume of cargo handled in the first seven months of this year, with 41,000 tonnes shifted, a further reflection of the upward trend in the Lebanese economy.

Such is the growing importance of BRHIA as an international aviation hub that Air Arabia, the Middle East's largest low-cost carrier, is considering establishing its third operations centre at the airport. According to Karim Hijazi, the managing director of aviation consultancy firm Air Synapsis, BRHIA has the inside track to become the Sharjah-headquartered airline's new base.

"We compared Egypt and Lebanon, and technically Beirut could be the best choice for Air Arabia for their third hub," Hijazi said in an interview with the Khaleej Times in mid-August.

Such praise for Beirut's airport and the rest of the country's transport infrastructure has not always been the norm. Over the years, Lebanon's transport facilities have come in for a good deal of criticism, as successive governments have suffered shortages of funds to improve the country's land, sea and air links, while at the same time meeting other demands on the budget.

Of course, along with the criticism has come some fairly rough treatment and years of often-enforced neglect. Lebanon's 16-year war, which ended in 1990, resulted in widespread damage to the transport grid. The long-running violence and political instability meant there was little opportunity to repair or upgrade infrastructure.

With a return to peace, efforts were made to restore and improve existing transport links and undertake new projects, though fiscal constraints meant that there was never enough funding to do all that was required. Despite those restrictions, Beirut's airport underwent a series of upgrades, with two new runways added and passenger-handling capacity increased to 6m annually through the expansion of its primary terminal.

However, some of this work was undone in the summer of 2006, when Israel struck at Lebanon. Though its operation targeted the Islamist Hezbollah movement, there were also widespread strikes against transport infrastructure across the country, including in regions not under Hezbollah control. This resulted in the damage or destruction of some 600 km of roads, 73 bridges and many of Lebanon's main transport facilities, in particular ports up and down the coast and the BRHIA, which had all three of its runways put out of action.

Though the war damage to the airport was quickly repaired, it did take longer for confidence to return, with many international airlines wary of resuming flights into Beirut so soon after the conflict. Confidence was also shaken in May 2008, when protests led by Hezbollah closed the BRHIA for a week, though since that time the airport has operated undisturbed by internal or external disruptions.

However, there have been rumblings of late that this situation may not continue. In early August, Tel Aviv resurrected the spectre of Israeli military operations targeting the country amid speculation that Hezbollah would be included in the new Lebanese government. Israel has warned that if Hezbollah is involved in any future Lebanese government, strikes against Israeli targets linked to the group will be considered as an attack by the Lebanese state itself and as such would result in a response.

In early August, the Israeli defence minister, Ehud Barak, warned that Lebanon's infrastructure would be specifically targeted in any further military action, saying that operations in 2006 had actually spared many transport links and utilities at the request of Washington.

"What happened in the second Lebanon war will not happen again," Barak said on August 6. "At the time a message from the US indicated we must spare Lebanon's infrastructure."

This might come as something of a surprise to many Lebanese, given the level of destruction in 2006 and the high cost of trying to repair the damage.

While it is to be hoped that Tel Aviv's threats come to nothing, the beating of drums do sound a warning that the progress made by the Lebanese transport network over the past few years is constantly under a cloud, one that could direct a strike at tourism confidence and the economy.

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