'Bahrain Air' suspends operations

[Old King Coal]

From BahrainAir.Net (http://www.bahrainair.net)

Statement from the Board of Directors of Bahrain Air

Bahrain Air held an Extraordinary General Meeting today at which the shareholders made the decision to announce the company’s immediate suspension of operations and to file for voluntary liquidation in accordance with the Kingdom of Bahrain's Commercial Companies Law.

The company sustained considerable financial losses as a result of the unstable political and security situation in Bahrain. In 2011, during Bahrain’s State of National Emergency, the airline was instructed to suspend flights to several destinations, and also suffered from the lack of traffic to and from Bahrain, and from the restrictions on the Saudi Causeway. Despite the Royal Decree number 18 for 2011 Article 5/10 regulating land, sea and air transportation during Bahrain’s State of National safety which states that all affected parties will be fairly compensated, the airline, despite making official claims, has received no compensation.

The airline is now being required to make immediate payments on past government debts or face closure at the same time as having its scheduled operations, both destinations and frequencies, being reduced considerably by the Civil Aviation Affairs in the Ministry of Transportation. This effectively strangles the airline by simultaneously requesting payments and reducing its ability to generate the necessary revenues both to make these payments and to sustain long term profitability. The shareholders of the company have spared no effort to support the airline financially since its inception and to support the airline and Bahrain through the unrest in 2011. The airline has also spared no effort to negotiate a solution with the Minister of Transportation (who is also an active board member of Gulf Air). However, he has shown no inclination to provide a meaningful solution. His decisions to restrict route approvals have cost the airline BD 4.5 million in lost revenues over the last 3 months. The position of the Minister was made clear when, during a time of negotiation, he only extended the company’s AOC, after operational audits had been passed, for two months instead of one year. After meetings, the latest company proposal was forwarded last Thursday 7th February. During the EGM, a very negative response was received providing only minor route concessions in return for payments of over BD 4 million. In the circumstances, given the position of the Minister, the shareholders decided that had no option but to discontinue financial support and put the company into voluntary liquidation.

Today is a sad day for all Bahrain Air shareholders and employees, and for our loyal and valued guests, and all those who valued the freedom of choice when making their travel plans. We also helped promote Bahrain as a business and leisure destination and Bahrain International Airport as a passenger hub in line with the Kingdom’s Economic Vision 2030. In doing so, we have demonstrated that it is possible to provide high quality and reliable scheduled airline services a fraction of the costs achieved by state airlines if fair practices and equal opportunities are rendered. We have created a proud legacy, with one of the best records for on time performance and value for money in the region. Finally, we would like to thank our staff for their hard working and lasting devotion to the cause of Bahrain Air.

Further information will be communicated to passengers and the general public via our website BahrainAir.Net (http://www.bahrainair.net) .

[MikeAlpha7]

Not really a big surprise. It was always a matter of when it would go down.

Frankly speaking , the whole episode was wrong from the word go. A bunch of investors were fooled by a sweet talking ex-GF PCE to set up an airline in Bahrain. The guy was on a crusade and had personal vendetta because he was the first ever PCE to be sacked while in office. He sounded that he had a issue to settle with those who sacked him and what better than to compete against them and get a slice from the small cake that was getting smaller and smaller!!

The irony of all this episode is that this ex-GF PCE had in his possession a huge file from the auditors of GF which highlighted that GF will not be competitive or profitable airline with such structure and network. Yet , the guy using this information , thought he can do better than GF which has been in business for 60 years!

I feel sad for the staff and the crew of Bahrain Air.

[justwhenyouthought..]

Bahrain Air files for liquidation
By Sandeep Singh Grewal , Posted on » Wednesday, February 13, 2013

MANAMA: Bahrain Air last night announced the immediate suspension of all its operations, and plans to file for voluntary liquidation.

The decision was taken yesterday after an extraordinary general meeting with shareholders.

Around 300 staff are set to lose their jobs.

In a statement, the airline said it had suffered massive losses as a result of unrest in 2011, which led to profitable routes being cancelled and a general drop in passenger traffic through Bahrain.

However, it claimed it was also facing restrictions as a result of outstanding debts to the government, which it said had cost it BD4.5 million in lost revenues over the last three months alone.

"We are very sad and frustrated at the same time as Bahrain Air was not given approval for enough routes and had to make payments upfront, which meant shareholders had to put in money from their side," Bahrain Air chief executive officer Richard Nuttall told the GDN last night.

[Sciolistes]

Reminds me of Viva Macau :(

[Basil]

What does PCE stand for?

[ualgrizz]

What a great gig...never thought I would say so but I do miss the little island and the boys from Viva...was a shame to see it go down. The 3 and 4 day layovers in Sydney were not bad either.

[1stspotter]

PCE stands for President and Chief Executive. Same function like CEO in Western countries

[Landflap]

OK. So this guy was sacked by Gulfair & then goes next door, as PCE ! You really cannot make this stuff up !

[Panama Jack]

The irony of the situation, as Andrw explains, is that the local airlines will take all sorts of measures towards flight deck crew, such as getting them to sign 3-year bonds and limiting them from working for other airlines in the region so they don't pull up the stakes and pursue a better offer, all the while failing to write a non-compete clause into the contracts of their Executive Managment- the people who have the greatest potential to do damage to a corporation by going to work for a direct competitor.

[40&80]

And another for instance...
Tim Clarke the Chief something or other at E.K.
Tim worked for Gulf Air monitoring the fuel costs and published the fuel index for Captains...they let him go also.:ouch:
In fact Gulf Air managed to let go all their talented staff... expat. and Nationals go...Gulf Air have a talent for it..
These ex staff now relished sticking it to Gulf Air when ever and where ever in their new and increasingly potent management positions.
And a couple of more for instances....Gulf Air so peed off two Arab second officer cadets that one started Qatar Airways and the other E.Y.
Gulf Air should never have peed off any staff.....:eek:
I have just noticed Gulf Air have withdrawn my staff retirement travel privileges.
Bless em they never quit.:ugh:

[brassplate]

gf has a toxic working environment. their own nationals will acknowledge that. a country as divided as bahrain will have the same toxic work environment in every level of society. even the fact that bahrainair came into existence proves that.