Unfortunately, the only way to make a short-haul network profitable is to cut costs dramatically. Short-haul, full-service operators in Europe have taken the brunt of the downturn and I'm not sure that the Government of Bahrain fully realizes the implications of going down the short-haul road. All those high-paying management, pilot and cabin crew jobs are going to have to go. I suspect, therefore, that the hurt is only just beginning for Gulf Air.
0-1:
How can an airline, no matter how small, even with a single aircraft, fly when "All those high-paying management, pilot and cabin crew jobs" are gone?
A remote-controlled aircraft?
I hate to say this but there's just too many ill-informed (or uninformed) people on this thread.