Monday, February 20, 2012

Support for national carrier urged

BAHRAIN's government has been urged to do more to support the country's national carrier. Gulf Air has been hit hard by political upheaval both abroad and at home since the start of last year, derailing a recovery plan that was designed to guide the airline into profitability.

Head of the Shura Council's financial and economic affairs committee Khalid Al Maskati yesterday said the government must come up with ways to prop up the airline.

He also called for a purge of "incompetent" staff - whether Bahraini or expatriate.

"The problem with Gulf Air is that the government wants it to continue, but is not helping it enough - as other countries have done with their airlines - to stay on its feet and compete," he said as the upper chamber of Bahrain's National Assembly met yesterday.

"Abu Dhabi's government paid a lot to support Etihad, the same was done by Dubai's government with Emirates and so on except for us, as (it seems) we just want Gulf Air to perform excellently without anything to help it.

"Bahrain has to look for ways to support the airline whether through revising aviation fees imposed on Gulf Air or the price of fuel being provided," Mr Al Maskati added.

He said people remained proud of Gulf Air because it was still operating despite the setbacks it had faced.

"We congratulate the management on taking correctional measures all the time to help the company, but it is time for the internal structure to be revised," he said.

"The best must stay, whether Bahraini or expatriate, and the incompetent must go."

Meanwhile, Mr Al Maskati urged the government to reconsider the suspension of profitable Gulf Air flights to Iran and Iraq.

They were suspended in the wake of anti-government protests last year, amid allegations of foreign interference in Bahrain's internal affairs.

"Gulf Air is either a company that should be looking for profit or is a political scapegoat for the government in its conflict with both countries," Mr Al Maskati said.

"Saudi Arabia has flights ongoing to Iran despite their tense relationship with the leadership of that country and everyone is asking until today why flights to both countries are still halted?"

Mr Al Maskati was speaking as the council approved a royal decree dating back to 2010, which granted BD400 million to Gulf Air to support its recovery plan.

Gulf Air chairman Talal Alzain also spoke at the session yesterday and denied allegations that the airline had not been investing in new planes.

"Previously we had aircraft that were more than 12 years old, but today our aircraft are just six years old," said Mr Alzain.

"Those flying to Gulf destinations can see that we are using new aircraft introduced in the market for the first time.

"We are competing with big airlines in the region that are backed by their governments and our only option is to introduce new aircraft to complete with them."

However, he said the airline had suspended the use of aircraft dating back to 1995 because it couldn't afford a refit.

"While other airlines change chairs every five years, we are unable to do so," he admitted.

Mr Alzain said negative Press about Gulf Air was affecting the morale of its staff and stressed that it was operating in a small market in Bahrain - having previously been catering to travellers in Abu Dhabi, Qatar and Oman before those governments pulled out of a joint ownership arrangement to concentrate on their own airlines.

"We have to acknowledge that the market is small and our share in it is small," said Mr Alzain, who is also chief executive of the Bahrain Mumtalakat Holding Company, which oversees government investments and manages a portfolio of companies, including government-owned Gulf Air.

"Bahrain can't take more than one national carrier."

Meanwhile, he said the BD400m cash injection from the government in 2010 significantly helped balance the books.

He said by the end of that year the airline was well ahead of its targets in terms of reducing losses.

"We on paper had a figure that we wanted erased from the deficit, but we were way ahead and managed to reduce it further - but last year's unrest put us back hugely," he said.

"Everyone knows that the whole network in the region has been affected due to unrest in countries like Tunisia, Egypt and most notably on our home ground," he added.

Meanwhile, Transport Minister Kamal Ahmed said Gulf Air had not been the only company to suffer as a result of the unrest over the past year.

"Gulf Air, like many other sectors in Bahrain, has been affected due to the unrest and before the company had a market of four member countries (Bahrain, Qatar, Abu Dhabi and Oman), but today mainly depends on passengers from Bahrain," he said.

"The small market means that the government has to support the company throughout and in return the airline will support the economy directly and indirectly.

"We have various options for Gulf Air and how it should be run in future, but all are difficult and need the support of everyone, whatever is chosen," Mr Ahmed added.

Four government proposals for the airline currently under review include dissolving the airline altogether, selling it off and launching a new national carrier, downsizing it or allowing it to continue in its current form with government support.

A joint parliament and Shura Council committee was formed last month to study the proposals.

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