Bahrain Shura backs $488m Gulf Air bailout
Manama, June 24, 2014
Bahrain's Shura Council voted unanimously in favour of a BD185 million ($488.2 million) bailout for national carrier Gulf Air yesterday (June 23) after receiving a detailed chart on where the money was spent.
The carrier received the cash by Royal Decree in 2012, but the payment was not formally approved by parliament until a narrow vote in February - despite calls from some MPs to reject it in protest at the way the decision was made without their consent, reported the Gulf Daily News, our sister publication.
If the chambers had rejected the decree, the airline would have been forced to return the money.
"BD78.3 million was spent to restructure the aircraft fleet, manpower and human resources; BD59.7 million on ongoing loans; BD23 million for late payments; BD23.7 million for operational costs; and BD800,000 remained in the airline's coffers," said council financial and economic affairs committee secretary Dr Abdulaziz Abul.
"Gulf Air initially planned to spend BD59 million on the aircraft fleet, but it reduced the amount to BD26.1 million after negotiations.
"It also saved an additional BD46 million after settling agreements with aircraft providers, who the company was leasing from. Two new Airbus A321s were also purchased at a cost of BD27.2 million, he added.
He said the bailout had been used wisely, with banks receiving interest of BD500,000 - while BD25 million paid for early retirement packages.
Dr Abul added the airline's accumulating loans reached BD82.7 million and were rescheduled for payment last year and this year. – TradeArabia News Service