A few months ago I was talking with a friend who did a few mental gymnastics with the numbers. Given the current amount of money we are losing, it would be cheaper for the Bahraini Government to shut down the airline and send all 5000 employees their monthly paycheck to stay at home or spend their days in the shopping mall rather than to continue running the airline.
Another option (change nothing) is to continue to run an expensive model railroad-cum-flying club that swallows up a third of Bahrain's budget.
Fortunately, the leaders of this country (in their wisdom), reject either of these two visions for the future and are finally figuring that in order to maintain an airline (whilst not ignoring the pressing demands for social housing, medical care, infrastructure and other demands of the country and its citizens), the airline must become more self-sustaining.
Skybeds, other countries "have things" because these "things" either pay for themselves, are run by the private sector, or are paid for by tax money from its citizens. The current Gulf Air business model does not meet the litmus test for any of these situations in Bahrain. In the rest of the world where people may be paying 40% of their income on taxes to the government, they demand fiscal responsibility to keep their taxes from spiraling upwards.
It's not often, but today I have to agree with
brassplate. With the changes hopefully Bahrain will end up with an airline that serves its needs much better, costs less to Bahrain and its future generations, and allows Government funds to be redeployed on better roads, sewers, schools and clinics.
Either way, Gulf Air's business model, as we know it, is broken and the airline needs to evolve. Otherwise, the Golden Falcon risks joining the following:
List of extinct birds - Wikipedia, the free encyclopedia