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Gulf Air losses to fall sharply this year

MANAMA, April 8, 2015

Bahrain’s national carrier Gulf Air's losses this year are expected to be less than a quarter of what they were just three years ago.

Transportation and Telecommunications Minister Kamal Ahmed told MPs yesterday (April 7) that was due to a major restructuring exercise launched in early 2013, said a report in the Gulf Daily News (GDN), our sister publication.

He revealed losses of BD40 million ($105.5 million) and BD50 million were forecast for 2015, compared to BD200 million in 2012.

Ahmed was responding to a question on the losses of Bahrain Mumtalakat Holding Company, Bahrain's sovereign wealth fund which oversees a portfolio of 36 companies including Gulf Air.

The minister, who is also Mumtalakat chairman, also urged MPs to stop trying to portray the sovereign wealth fund as 'corrupt'.

“Again we are speaking about Gulf Air's situation in 2006 rather than reflect the vast improvements that we have made to reduce regular annual losses of BD200 million every year to around BD60 million by the end of last year,” he said in response to criticism of the national carrier.

“This year our projection is (losses of) between BD40 million and BD50 million.

“We don't want another MP to come in four years and use Gulf Air to play the emotional card and generally describing Mumtalakat as a corrupt company, similar to what is being circulated by MPs these days.

“Mumtalakat was established without capital and some of the 36 companies under it are profitable, like NBB and Batelco.

“Others are losing money like Gulf Air, which for 20 years faced huge difficulties and we even asked parliament to close it.

“MPs asked for its continuation and we are taking profits from other companies under Mumtalakat and pumping it there, otherwise the government would be forced to do so.

“We have made savings of BD250m at Gulf Air since introducing our ambitious strategy to restructure the company in 2013 and we are further developing it with assurances that previous mistakes will not be repeated.”

He dismissed violations documented at Gulf Air by the Financial Audit Bureau, saying 'we have moved beyond that', and said Mumtalakat was operating at a profit.

“We have managed to get BD100 million in profits from all companies (in 2014) and, after distribution among shareholders, BD60m went into our coffers and BD10 million went towards operational costs.

“There are no losses and we are in a good financial status with our new investments not having any risky status.

“The government is not concerned with the repayment of Mumtalakat loans and our companies depend on borrowing for investment, which is an international approach rather than risking existing available assets.”

The minister accused MPs of confusing the public with claims about Mumtalakat's status.

“Edamah's (the real estate arm of Mumtalakat) loss of BD250m is just on the books,” he said.

“In reality it is not (a loss). It is government property given to us for investment, but later on the government discovered it needed to take some back for infrastructure projects - which is not a loss.” - TradeArabia News Service




Tags: Gulf | Sharp | Losses | Fall | quarter | Air | less |

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