Gulf Air says Bahrain mulling turnaround options
Gulf Air, Bahrain's loss-making national carrier, said on Wednesday that all options were being considered to make it profitable after a newspaper reported that the airline may be dissolved or sold.
January 25, 2012 2:22 by Reuters
“At this stage a range of strategic options are being considered,” a spokeswoman for Gulf Air said in an emailed response to questions on the future of the carrier.
She said that Gulf Air, its shareholder Mumtalakat — Bahrain’s sovereign wealth fund — and the government were all working towards addressing the airline’s loss-making position, but declined to go into specifics.
Bahraini newspaper Gulf Daily News reported that the government is considering options including dissolving or downsizing the airline, or selling it and creating a new national carrier at the cost of 460 million dinars ($1.22 billion).
Gulf Air, which competes with the likes of Dubai’s Emirates and Qatar Airways, has been hit by falling passenger numbers as anti-government protests continue in the island kingdom.
“Gulf Air has faced challenges in recent times, in common with other carriers around the world, and combinations of unprecedented regional and economic factors have made business increasingly difficult,” the spokeswoman said.
Earlier this week, a government delegation briefed parliament and called for a restructuring of the company for “effective operational requirements”, the state news agency reported.
It recently implemented a strategy to find a niche by building a network of regional routes to destinations it sees as under-served.
The airline said in May it had laid off 200 employees and that bookings were down by a quarter following the Arab Spring uprisings in the region. ($1 = 0.3770 Bahraini dinars) (Reporting by Praveen Menon, Editing by Sitaraman Shankar)