CASH-STRAPPED Gulf Air was yesterday accused of failing to chase down travel agents abroad who owe the airline hundreds of thousands of dinars.
MPs also claim delays in selling off two aircraft led to millions of dinars in losses for the national carrier.
Parliament's financial and economic affairs committee made the claims following a meeting with the company's board of directors, led by Gulf Air chairman Talal Alzain.
Members of the committee demanded answers on a number of issues raised in the Financial Audit Bureau report for 2008, while accusing the airline of hiring consultants without properly justifying their appointment.
Other criticisms focused on the filing of a bribery lawsuit against a Gulf Air employee, which was subsequently dropped, as well as salary increases of up to 220 per cent for individual staff and the airline's early retirement scheme.
Action
"The action Gulf Air has taken to collect its money and ensure that it doesn't get lost or squandered is weak," said committee chairman Abduljalil Khalil. "We spoke in the meeting about six million Moroccan dirhams (BD299,000) owed by 30 Moroccan travel agents; 800,000 Saudi riyals (BD84,640) owed by Saudi travel agents; and $1.5m (BD567,000) owed by Lebanese travel agents that were not collected.
"The meeting also focused on the company's failure to sell two Boeing 767s on time, which has led to a loss of BD23.5m.
"The company has also been questioned about the reasons behind employing consultants on temporary contracts without their job descriptions being mentioned.
"We have also spoken with the management on the company's decision to withdraw a case against an expatriate employee, who has allegedly pocketed BD423,000 after taking the case to the Public Prosecution, despite clear evidence that he is involved in bribery and misuse of authority."
Mr Khalil demanded a copy of the inquiry report on the employee should be presented to parliament to make MPs aware of all aspects of the case.
"The company has violated the early retirement scheme by giving 14 employees the go-ahead, despite knowing that they are already near retirement -which has cost the company BD419,000," said Mr Khalil.
"A pay differential (promotion-related pay rise) has been given to 370 employees, sometimes reaching 220pc - something that has led to BD1.64m in losses. Gulf Air owes the Pension Fund Commission BD449,000 for unpaid contributions over the years. The company has cancelled 661 flights on 48,627 passengers and delayed 11,050 flights for 1.3m others."
Mr Khalil also said Sky Chefs cost the company BD1.1m every year, but no study had ever been carried out into the viability of the service.
He demanded that Gulf Air respond to the accusations in writing and present its response to parliament.
Meanwhile, a Gulf Air spokesman said the airline yesterday presented its response to the questions raised by the parliament committee.
"Gulf Air's priority is to deliver a commercially sustainable and dynamic airline that effectively serves the people and the economy of Bahrain and represents the kingdom on the world stage," he said.
"As part of the new strategy, Gulf Air is working hard to align its cost base, maximising investment into areas of the business that will offer the best returns whilst reducing cost in those that don't. Less than eight weeks since announcing our plans, our efforts are already starting to pay off as we strive to reach profitability by 2012."
Bahrain's national carrier hopes to save almost $3 billion over five years as it restructures to compete in the Gulf's increasingly cutthroat aviation market, it was revealed in November.
The airline launched its new business strategy after a three-month structural review, saying it plans to become a sustainable business by 2012. Gulf Air, which expects to post an operating loss of BD193m this year, hopes to break even by 2012
