Bahrain considers 'selling off Gulf Air and starting again'
Originally published on www.businesstravellerme.com 26/01/2012 - Filed under: News »
Selling off Gulf Air and building a new carrier from scratch is one of the options on the table in Bahrain, according to a report in the Gulf Daily News.
The report states other options include dissolving the airline altogether, downsizing the fleet or allowing it to continue in its current form with government support.
Starting again would cost BD460 million, about BD140 million less than downsizing, the report adds. A joint parliament and Shura Council committee formed on Monday tasked to study the government proposals.
Gulf Air, which aims to break even by 2013, remains surrounded by stiff competition with Emirates, Qatar Airways and Etihad Airways expanding rapidly.
It hasn't been helped by the regional boom in LCCs too, with Air Arabia and Fly Dubai picking up more business traffic in the downturn. Closer to home, Bahrain Air recently announced it is investing in a new business class product (click here).
Last year it fought back by investing in new IFE products on its A330s (click here) and launching new routes to Milan, Geneva, Rome, Entebbe and Juba (click here and here).
But both the expansion of its rivals and challenging global economic situation, both factors beyond its immediate control, continue to pressurise the carrier's revenues and pursuit of profitability.
A spokesperson said: "Gulf Air, its shareholder Mumtalakat and the government, both through the cabinet and parliament, are all working towards a common goal – to secure Gulf Air's long-term sustainability and to actively address the airline's loss-making position. A range of strategic options are currently under consideration."
For more information, visit gulfair.com
Report by Dominic Ellis
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