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Bahrain MPs resist aid plan for Gulf Air

Manama, April 17, 2012

Bahrain parliament's financial and economic affairs committee yesterday (April 16) recommended MPs reject a proposal to pump BD664.3 million ($1.76 billion) into Gulf Air to help revive its fortunes.

Committee chairman Ali Al Durazi said the decision had been taken due to the so-called unclear status of the airline's board and executive management as well as disagreements about the four-point plan created to revive the airline.

One of the options was downsizing the carrier in a bid to reduce losses, which would include cancelling international agreements and redundancies.

The others were dissolving the airline altogether, selling it off and launch a new national carrier at a cost of BD460 million or allowing it to continue in its existing form with government support.

If the National Assembly sanctions the financial aid, the expected gross domestic product (GDP) deficit would increase from 9.5 per cent to 15.8 per cent, as reports submitted by the government have indicated.

"Our recommendation is against sanctioning the financial aid to increase Gulf Air's capital in this year's budget because the government has failed to present us with a clear stance on the airline's current board and its executive management," said Mr Al Durazi.

"Besides that the government and the National Assembly have failed to reach an agreement on the four options that would determine the airline's future.

"The financial aid will also increase the expected GDP deficit which will increase for this year from 9.5 per cent to 15.8 per cent and it is unacceptable from an economic aspect."

The issue will be discussed in parliament next Tuesday after the committee submitted its report to chairman Khalifa Al Dhahrani. – TradeArabia News Service




Tags: Gulf Air | Bahrain | Manama | Parliament | MP | Bail-out |

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