Bahrain Air ceases operations

13 Feb 2013 by BusinessTraveller

Bahrain Air has ceased all operations and filed for voluntary liquidation.

The carrier operated flights from its base at Bahrain International airport to countries including Bangladesh, Egypt, India, Iraq, Qatar, Saudia Arabia and the UAE.

In a statement the airline said that it had “sustained considerable financial losses as a result of the unstable political and security situation in Bahrain”.

“In 2011, during Bahrain’s State of National Emergency, the airline was instructed to suspend flights to several destinations, and also suffered from the lack of traffic to and from Bahrain, and from the restrictions on the Saudi Causeway.

“Despite the Royal Decree number 18 for 2011 Article 5/10 regulating land, sea and air transportation during Bahrain’s State of National safety which states that all affected parties will be fairly compensated, the airline, despite making official claims, has received no compensation.

“The airline is now being required to make immediate payments on past government debts or face closure at the same time as having its scheduled operations, both destinations and frequencies, being reduced considerably by the Civil Aviation Affairs in the Ministry of Transportation.

“This effectively strangles the airline by simultaneously requesting payments and reducing its ability to generate the necessary revenues both to make these payments and to sustain long term profitability.”

The statement also claims that Bahrain’s Ministry of Transportation “has shown no inclination to provide a meaningful solution”, and concludes that “the shareholders decided that [they] had no option but to discontinue financial support and put the company into voluntary liquidation”.

In January last year the carrier announced plans to refit its aircraft with a new business class configuration, along with intentions to expend its operations (see online news January 15, 2012).

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Report by Mark Caswell

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