Bahrain's Gulf Air to downsize, seeks state funds
* Discussing cash injection from government, state fund
* CEO says will downsize fleet, cut networks
* Airline will not sold or dissolved - CEO (Recasts, adds CEO comments)
By Praveen Menon
DUBAI, Jan 25 (Reuters) - Bahrain's struggling national carrier Gulf Air, hit by falling passenger numbers as anti-government protests continue in the tiny island kingdom, will shrink operations and seek cash from government funds, its chief executive said on Wednesday.
The move is in contrast to Middle East competitors such as Etihad, Qatar Airways and Dubai-based Emirates which have been expanding their networks.
"The downsizing will affect the network and affect the fleet," CEO Samer Majali said. He said staff numbers would not be affected.
The airline could tap Bahrain's sovereign wealth fund Mumtalakat, which has a stake in the carrier.
"This is currently being debated," Majali said when asked if the airline expects to get any assistance from the government or Mumtalakat.
Bahraini newspaper Gulf Daily News reported on Wednesday that the government is considering options including dissolving or shrinking the airline, or selling it and creating a new carrier at a cost of 460 million dinars ($1.22 billion).
Majali said the sale of the carrier or its dissolution was unlikely.
"The country needs an airline....they will retain the airline but at an affordable level," he said.
OPTIONS OPEN
Gulf Air said on Wednesday that all options were being considered to make the airline profitable.
"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.
"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.
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) (Editing by Dinesh Nair and David Cowell)
http://www.reuters.com/article/2012/01/25/gulfair-idUSL5E8CP2DZ20120125
Gulf Air CEO Says Bahrain Govt Decided To Restructure Airline
Wednesday, Jan 25, 2012
DOHA (Zawya Dow Jones)--The boss of Bahrain's beleaguered national airline said Wednesday a downsizing of the business was the most likely plan following a government decision to restructure the loss-making carrier that has suffered due to political unrest in the tiny Gulf kingdom.
A shrinking of the airline's business would mean cutting routes and possibly slashing staff and selling planes, Gulf Air chief executive Samer Al Majali told Zawya Dow Jones via telephone Wednesday.
-By Alex Delmar-Morgan, Dow Jones Newswires; +974 6659 9818; alex.delmar-morgan@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
* Discussing cash injection from government, state fund
* CEO says will downsize fleet, cut networks
* Airline will not sold or dissolved - CEO (Recasts, adds CEO comments)
By Praveen Menon
DUBAI, Jan 25 (Reuters) - Bahrain's struggling national carrier Gulf Air, hit by falling passenger numbers as anti-government protests continue in the tiny island kingdom, will shrink operations and seek cash from government funds, its chief executive said on Wednesday.
The move is in contrast to Middle East competitors such as Etihad, Qatar Airways and Dubai-based Emirates which have been expanding their networks.
"The downsizing will affect the network and affect the fleet," CEO Samer Majali said. He said staff numbers would not be affected.
The airline could tap Bahrain's sovereign wealth fund Mumtalakat, which has a stake in the carrier.
"This is currently being debated," Majali said when asked if the airline expects to get any assistance from the government or Mumtalakat.
Bahraini newspaper Gulf Daily News reported on Wednesday that the government is considering options including dissolving or shrinking the airline, or selling it and creating a new carrier at a cost of 460 million dinars ($1.22 billion).
Majali said the sale of the carrier or its dissolution was unlikely.
"The country needs an airline....they will retain the airline but at an affordable level," he said.
OPTIONS OPEN
Gulf Air said on Wednesday that all options were being considered to make the airline profitable.
"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.
"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.
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) (Editing by Dinesh Nair and David Cowell)
http://www.reuters.com/article/2012/01/25/gulfair-idUSL5E8CP2DZ20120125
Gulf Air CEO Says Bahrain Govt Decided To Restructure Airline
Wednesday, Jan 25, 2012
DOHA (Zawya Dow Jones)--The boss of Bahrain's beleaguered national airline said Wednesday a downsizing of the business was the most likely plan following a government decision to restructure the loss-making carrier that has suffered due to political unrest in the tiny Gulf kingdom.
A shrinking of the airline's business would mean cutting routes and possibly slashing staff and selling planes, Gulf Air chief executive Samer Al Majali told Zawya Dow Jones via telephone Wednesday.
-By Alex Delmar-Morgan, Dow Jones Newswires; +974 6659 9818; alex.delmar-morgan@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
