x Abu Dhabi, UAESaturday 29 July 2017

Dwindling traffic, unrest forces Bahrain Air to liquidate operations

Bahrain Air said it has suspended operations and will liquidate, succumbing to dwindling traffic and mounting competition from larger state-controlled carriers.

Bahrain Air, the Arabian Gulf country's first privately owned airline, said it has suspended operations and will liquidate, succumbing to dwindling traffic and mounting competition from larger state-controlled carriers.

The "unstable political and security situation" in the country led to "sustained considerable financial losses," Bahrain Air said in a statement, following an extraordinary general meeting for shareholders. The company said it suspended all flights yesterday, and any stranded passengers will have to make make their own arrangements to reach their destinations.

Yesterday was "a sad day for all shareholders and employees, and for our loyal and valued guests," the airline said on its website late yesterday.

Authorities in Bahrain asked the airline to suspend flights to several destinations when political unrest erupted in 2011, and the company said it had unsuccessfully sought compensations. Bahrain Air's breakdown contrasts with the fortunes of Emirates Airline, Etihad Airways and Qatar Airways, the state-owned Gulf carriers that have expanded into global airlines to challenge established network carriers

Bahrain Air, which began operations in 2008 with flights to Dubai, suffered from the lack of traffic to and from Bahrain, and restrictions to operate on many routes have cost the carrier 4.5 million Bahrain dinars in lost revenues over the last 3 months, it said.

Shareholders decided to stop supporting the airline financially this week after the ministry of transportation demanded a payment of 4m dinars in return of opening some "minor" routes, it said. The airline, with about 300 employees, is now being required to make immediate payments on past government debts or face closure at the same time as authorities reduced its routes and frequency, it said.

 

* Bloomberg News