Strikes, scandals and huge losses -- about $60 million in 1998 alone -- have almost grounded MEA, whose cedar-emblazoned fleet thrived before Lebanon's devastating 1975-1990 civil war.

The government, management and staff all agree the 51-year-old carrier needs restructuring on an enormous scale. The new government of prime minister Selim al-Hoss set up a committee to evaluate MEA but its future will be uncertain until the parties agree how to return the airline to the black.

The central bank ended up with 99 per cent of the airline in 1996 in an effort to stave off collapse after years of losses under joint state and private control. According to MEA, the state has sunk more than $250 million into the firm since 1989.

``We don't look good supporting a commercial company like that,''transport minister Najib Mikati said recently. ``But unfortunately, we don't have a vision for MEA.''

MEA officials and analysts say the airline, like many state bodies, has suffered from political interference.

``How can anyone run an airline that everybody has a say in ? ''asked a senior MEA executive. ``The airline has been used for political and social purposes without any thought to its commercial viability. Apparently, the government has treated it more like a charity.''

During and after the sectarian war, politicians stuffed MEA's offices with relatives and supporters, resulting in a grossly over-staffed airline with 4,500 employees serving a nine aircraft fleet.

MEA's chain-smoking, forty-something chairman Mohamedal-Hout, who took office a year ago, has said half the staff must go. But the MEA executive said that was easier said than done in a country with a slowing economy and under employment.

``If you try and fire anyone, they go and complain to their politician ally who makes surenothing happens. The government is scared to cut back staff because they don't know what to do with 1,000 or more people. They'll have a crisis,'' he said.

Unions for MEA pilots, ground staff and fight attendants bristle when Hout's team mentions over- employment, blaming downsizing. The MEA chairman has cut the fleet from 13 to nine, cancelled eight routes including Sydney, Sao Paolo and Brussels, shut offices abroad and contracted out maintenance work.

``How can they say that there are too many people when the number of airplanes and flight routes have been reduced ? '' asked a spokesman for the Lebanese Pilot's Association (LPA).

``Why does the management think that scaling back the airline will make it more efficient? Why don't they consider expanding it then they won't have a staffing problem.''

Bad blood has tainted relations between MEA's employees and the new board given the task of restructuring. Both staff and management have accused each other of lying, particularly about salaries -- the154 pilots say their average wage is about $5,000 a month while MEA says it is $8,500.

``Arrogant, ignorant, adolescent,'' the LPA spokesman said of Hout. ``Lazy blackmailers who, like children, protest anything they don't like,'' the chairman reportedly retorted.

The LPA expelled three pilots in 1998 for refusing to protest against Hout's policies. ``We strike because we're concerned about our company and livelihood. It's the only way we can be heard,'' the association's spokesman said.

As if differences with staff are not enough, MEA does not see eye-to-eye with the cabinet on an ``open skies'' policy which gives foreign airlines unlimited access to Beirut airport. MEA estimates the competition costs it $20 million year but the state says it is good for tourism.

``If open skies is good for tourism, it's bad news for income and us,'' the MEA official said. ``I can't compete with KLM or Air France. They're big. They don't have as many problems and they haven't gone through 15 years of war.''

SomeMEA losses were reportedly caused by shady deals. In November 1997, the central bank said it had notified the judiciary about suspected embezzlement at MEA related to a $39 million deal under with it leased planes from Singapore Airlines for five years. No official charges were made and the deal was eventually renegotiated.

The airline made a $87.4 million loss in 1997, in which it spent $7.7 million more on leasing three Airbus planes than originally expected.

Financiers have prescribed privatisation as a cure, but finding a buyer for what even some MEA staff call ``a white elephant'' will be very difficult.

``No one in their right mind will buy a company that has so many people doing nothing and which the government is clearly reluctant to get rid of,'' the MEA executive said. ``Run properly, MEA can make a profit of up to $40 million a year in two years.''

The transport minister has said the government pays more than $6 million a month just to keep MEA running. He wants to privatise the airline buthas vowed to keep jobs.

The LPA spokesman said employees will accept privatisation for the right compensation. ``Everywhere in the world, people get golden handshakes. Why not us? The average age of employees is above 40 and they've been working here for years.''

Financiers estimate the state will have to pay more than $60 million in severance costs -- a lot for a government burdened by a huge debt and a budget deficit.

``The government doesn't have much choice but until they decide, we wait. I hope not too long,'' the MEA executive said.

MEA pilots, however, see no urgency. ``What's the problem with having an airline that is in debt? '' asks their spokesman. ``Ninety-five per cent of national carriers are supported by the government. They're not supposed to make a profit. They fly the flag.''