GULF DIGITAL NEWS
7th APRIL 2015 - Vol.XXXVIII No.018
Local News

'Downward flight'

BAHRAIN's national carrier Gulf Air is on a flight path to financial ruin, unless it completely overhauls its business strategy and management team, according to an MP. Parliament's financial and economic affairs committee head Abdulhaleem Murad based this on the airline's 2009-2013 financial plan, which was allegedly leaked to the media and shows it is set to lose BD131 million this year.

The document shows this is up from BD115m last year and BD111m in 2006, while the losses are expected to reach BD226m next year.

An airline spokesman did not dispute the authenticity of the document, but said its contents were inaccurate and did not reflect the current situation.

However, despite predictions that debts will fall to BD22m by 2013, Mr Murad says the existing regime has had its chance and called for the management team to resign "immediately".

"They earlier said they were losing $1 million (BD378,000) daily and this had reduced to $700,000 (BD264,000) but the debts are increasing," he said.

"The losses are increasing because of the bad strategy of the board and the company overall.

"We cannot just watch it happen because this matter concerns all Bahraini citizens and we could use this money for other projects such as housing and schools.

"If Gulf Air continues with this strategy, I do not think it will last long.

"I am afraid that at a certain point, they will tell the government to pay off all its debts and turn it private."

Mr Murad was unable to give a timeframe on how long the airline may last, but said unless urgent action was taken it may pass the point of no return.

He said the situation was damaging Bahrain's reputation and had left hundreds of Bahrainis uncertain about their future.

"I am getting hundreds of calls from employees and they are very depressed," he said.

"They say 'why are they doing this to the company. Our families will be harmed if something goes wrong'."

Mr Murad also accused Gulf Air's management of not being transparent with the parliament committee monitoring the airline's performance.

He pointed to the lack of consultation about its purchase of 16 Boeing Dreamliner aircraft in March at a time when the airline was making huge losses.

"Our parliamentary committee have requested a lot of information so we can be satisfied with the situation, but unfortunately they do not provide all the information and tried to hide it," he said.

"We have met the board a lot of times in the last two years and they gave us big promises, but nothing has happened.

"We also requested meetings and a lot of times they had excuses and said they could not make it."

Mr Murad accused the airline of hiring unqualified and inexperienced expatriates ahead of Bahrainis.

He said another problem was a lack of continuity in the airline, as many staff, including senior managers, only stayed for four or five years.

"If they put proper people in place, Gulf Air will succeed, and for the past two years we have been trying to do that," said the MP.

Mr Murad also criticised Gulf Air's sponsorship of the English Championship football team Queens Park Rangers (QPR), which he described as pointless.

"If it was a well-known and high-profile team we would have welcomed it but nobody knows them," he said.

"Why not sponsor a team from Bahrain?"

Mr Murad said Gulf Air had a long history, superior to many of its rivals such as Etihad Airways, Emirates and Qatar Airways, and had the potential to be a leading airline.

"It is well known and has a long history and should be one of the best airlines in the Gulf," he told the GDN.

"But now we are seeing new companies progressing faster and getting better than Gulf Air. And most people in those airlines are ex-employees of Gulf Air."

A Gulf Air spokesman hit back at claims that the airline was set to post massive financial losses and that confidential information was leaked to the media.

"We are dismayed by the publication of the document," he said.

"The details in it are not worthy of comment as it is woefully inaccurate and in no way is a fair reflection of the current situation at Gulf Air.

"Our employees are extremely upset about this as ultimately it would have been them who suffered had the information been valid."

However, Mr Murad said the document was from Gulf Air's finance department and a senior official had confirmed to him that the information was 100 per cent correct.

He also denied that releasing confidential information to the media was harming the company, saying he had done it for the good of Bahrain.

"If the company had given information to the committee before, we would not have done this. But once they dealt with us in a bad way, we had to do it," he said.

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