Gulf Air Developments
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Have they actually been sold or are they going to the scrappers? I guess running and maintaining these old birds in this day and age is just too much to ask. Sad to see another operator ditch their a340's. My first flight ever with Gulf Air was on a 340, many moons ago.
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According to Al Wasat newspaper , on Thursday (Frontpage) quoting GF CEO Samer Al Majali "I have tendered my resignation in February , but the government of Bahrain has not responded to it."
This is the first official confirmation of Al Majali's resignation which refutes the official GF repeated insistence that their CEO has not resigned.
Interestingly enough . Al Majali said that he has no information about the so-called Management re-structuring nor about routes re-structures!
Insiders claim that the government is in real dilemma with the frustrated Al Majali's resignation. The Jordanian has openly blamed the government policies for the crises situation of the airline. The closing of high yield profitable routes , sacking of senior staff , political interference in the company including appointment of personnel not competent for the jobs , have all lead Al majali to give up and finally submit his reignation. The current no 2 in GF , Maher Al Mussalam ( one of the people that the CEO is complaining about) is not considered to be fit to lead the company even on temporary basis. However , the ex-military man has lots of clout in the hierarchy and could get the job despite his poor performance and military style management.
The Parliament is insisting on a clean up of GF specially the Middle and Higher management. There is also a lot of concern by several MP's that contracts are awarded without going through the proper procedures. Although GF is supposed to be under the authority of the government Tender Board , it is believed that many contracts with service providers ( like local landlords) have failed to meet the government strict criteria , yet somehow the contracts were awarded regardless.
Some MP's have been critical of GF Early retirement schemes and called for scrapping such a scheme immidiately. The Salfi group of MP are demanding a drastic reduction of Expatriates.
Neither the Minster of Finance nor the Transport Minister have a clear plan on how would the aid package demanded ( 660 Million BD) ensure the survival of the Airline leading the MP's to suspect that this financial support request would not be the last one from the Airline management.
Unconfirmed news: State of Qatar has dismissed any interest in buying Gulf Air.
This is the first official confirmation of Al Majali's resignation which refutes the official GF repeated insistence that their CEO has not resigned.
Interestingly enough . Al Majali said that he has no information about the so-called Management re-structuring nor about routes re-structures!
Insiders claim that the government is in real dilemma with the frustrated Al Majali's resignation. The Jordanian has openly blamed the government policies for the crises situation of the airline. The closing of high yield profitable routes , sacking of senior staff , political interference in the company including appointment of personnel not competent for the jobs , have all lead Al majali to give up and finally submit his reignation. The current no 2 in GF , Maher Al Mussalam ( one of the people that the CEO is complaining about) is not considered to be fit to lead the company even on temporary basis. However , the ex-military man has lots of clout in the hierarchy and could get the job despite his poor performance and military style management.
The Parliament is insisting on a clean up of GF specially the Middle and Higher management. There is also a lot of concern by several MP's that contracts are awarded without going through the proper procedures. Although GF is supposed to be under the authority of the government Tender Board , it is believed that many contracts with service providers ( like local landlords) have failed to meet the government strict criteria , yet somehow the contracts were awarded regardless.
Some MP's have been critical of GF Early retirement schemes and called for scrapping such a scheme immidiately. The Salfi group of MP are demanding a drastic reduction of Expatriates.
Neither the Minster of Finance nor the Transport Minister have a clear plan on how would the aid package demanded ( 660 Million BD) ensure the survival of the Airline leading the MP's to suspect that this financial support request would not be the last one from the Airline management.
Unconfirmed news: State of Qatar has dismissed any interest in buying Gulf Air.
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What a shame. A CEO who can not leave. A number 2 who is deemed incompetent. Inexperienced management, illawarded contracts and skilled pilots leaving at an alarming rate.
Once an airline admired throughout the ME. Now just sucking the last gasps of O2 ($) to make it yet another year.
Once an airline admired throughout the ME. Now just sucking the last gasps of O2 ($) to make it yet another year.
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The rescue plans for both Gulf Air and Air India bear some resemblance although the balance is the wrong way around. AI's rescue package by their goverment is 740m dollars whilst Gulf Air's around 560m per year. But Gulf Air is only a third in size yet it needs a massive bailout in comparison.
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Luckely Gulf Air is not alone in loosing money fast. Here another example, besides Air India earlier. Look at Aerolineas Argentinas nowadays. Used to be owned by a privat group but now under goverment control. 44 aircraft + 20 jets that operate with Austral. It has some similarities in the problems it has and how it operates. Goverment (tax payer) already spend 2.4bln dollars since 2008 on it and still today loosing 2.2mln dollars PER DAY.
How come some airlines just can't turn things around even with
extortionate amounts of money being thrown at it?
How come some airlines just can't turn things around even with
extortionate amounts of money being thrown at it?
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Read in a bussiness magazine that the region's airlines total profit for 2011 was a megre few million. I reckon all them publicised figures are a load of malarkey. The chap i was flyin with says kingfisher got their bird impounded in heathrow a few weeks back or so.
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John21UK quoted "How come some airlines just can't turn things around even with extortionate amounts of money being thrown at it?"
This is a very good question.
I don't claim to know anything about Aerolineas Argentinas or even Air India's financial plight , but I sure know a few things about Gukf Air.
The current GF will go on losing money and requiring fund injection for the foreseeable future simply because all that funds gets misappropriated by the same Management that lacks vision , skills to compete in the Aviation market , experience to tackle demanding issues and last and most importantly , an owner (the government) that has much more serious issue to deal with and a government that is known to have poor crises management skills.
It is a well known fact that the higher management of GF have been getting orders from 3 different government heads , and most of the time , each one with a different priority and agenda and conflicting orders at that.
That is touching the surface of GF problems , the rest of the story is much longer and regrettable.
But give GF credit for maintain a good & safe flight operations despite some stories leaking among the crew of some close shaves by pilots committing serious errors. My Guess, if those stories were accurate , is the fact that GF pilots have been over-worked.
This is a very good question.
I don't claim to know anything about Aerolineas Argentinas or even Air India's financial plight , but I sure know a few things about Gukf Air.
The current GF will go on losing money and requiring fund injection for the foreseeable future simply because all that funds gets misappropriated by the same Management that lacks vision , skills to compete in the Aviation market , experience to tackle demanding issues and last and most importantly , an owner (the government) that has much more serious issue to deal with and a government that is known to have poor crises management skills.
It is a well known fact that the higher management of GF have been getting orders from 3 different government heads , and most of the time , each one with a different priority and agenda and conflicting orders at that.
That is touching the surface of GF problems , the rest of the story is much longer and regrettable.
But give GF credit for maintain a good & safe flight operations despite some stories leaking among the crew of some close shaves by pilots committing serious errors. My Guess, if those stories were accurate , is the fact that GF pilots have been over-worked.
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Fund injections also a complete joke. Same sticky fingers will go into the till and come out with, guess what, loadsa money stuck to fingers ! Contracts will then be awarded to brothers, sisters, uncles, aunties & jobs will be awarded on the same basis. Totally corrupt, rotten little company. But, it will continue & as Buba says, he has seen it all before & it does serve to employ people. It offers , also, some degree of security to Nationals. Very talented expats remain because it serves THEIR purpose. For some, regrettably, there is nowhere else to go. Damn shame because the country was the best place in the Mid East. GF was, probably still is, from the "personnel" point of view, a truly fabbo place to work & the so called "Locals" amongst the most courteous, civil and really humour filled group of people I have had the pleasure to know. Only did a short spell and been away for years now but memories are a full & joyfilled. Wish you all well but I fear the worst.
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MP responding to GF loan request.
Al Wasat Newspaper
Sunday 18th March 2012
Local Affairs Correspondent: Hassan Al Madhoob
(Translated from Arabic Text)
Khalid Abdel Aal, a member of the Parliamentary Committee set up to study the financial situation of Gulf Air's , declared that «the government wants to hand over the loan of BD 664 million to Gulf Air in just 25 days from the day of a request submitted to the House of Representatives late last week».
According to Abdel Aal, «through my discussions with the deputies, I think that most of them would refuse to agree to pass this loan so quickly and without the Government providing a feasibility study or define a commercial strategy in return to the parliament loan approval, and especially since the deputies had already agreed to pass the previous grant to Gulf Air, worth BD 400 million in less than a year ».
He added «up to now, there is no conclusive justification to persuade the lawmakers to approve the new loan, and especially since the government says there are no guarantees that such loan (BD 664 million) will lead to the transformation of the company into profitability ».
Abdel Aal, added «Ministers of Finance and Transport told us explicitly that there are no guarantees, and that the losses will continue, but they stated that the loan is important because the company's closing down will hurt the national economy!».
He pointed out that «since the company received the BD 400 million loan in less than a year; it has recorded losses of BD 200 million, and projected annual loss will range between 80 and 100 million dinars.” The MP continued “ is there any greater impact on the national economy than the losses suffered by the company?».
The member of the Parliamentary Committee continued «they (the government) want the parliament to approve the loan and deliver it to Gulf Air in a period of 25 days , while they had a whole month since the formation of the Parliamentary Committee, in which they did have some requests , but did not indicate to us their intention to request an additional appropriation to inject additional funds to the company. Despite the fact that we repeatedly asked them to provide us with all the details and plans related to the company’s recovery strategy, the government surprised the committee at our meeting last Thursday (March 15, 2012) by submitting this request during the meeting and without responding to our requests for information».
Abdel-Aal said «that is a deliberate move by the government to divert the blame on the House of Representatives , by putting us in the status quo with an ultimatum, either approve the loan and open additional credit facilities or the company will close down and the economy will suffer and the national unemployment number will increase in the process».
«the conditions of Representatives for approval of any adoption of additional financial aid package to the company, is quite clear to the government , which are : 1) the complete change of the Board of Directors , because they are part of the causes of the company’s losses, as well as executive management, 2) submission to the committee the current operational performance data of the company, and 3) clearly defined plans on when it will turn to profitability», Abdul Aal stressing «We are not against the survival of the company, But very much against the wastage of public money under the pretext of helping the economy ».
He continued to say «We are well aware that the problems are not caused by the new administration, as during the past 10 years, Gulf Air lost over 1 billion dinars, how long will it continue to lose? and if the argument for keeping the company is a national employment, then retirement program that encompasses handsome financial rewards for all Gulf Air national (local) staff , will not cost the company much more than BD 40 million».
He continued «the House of Representatives has been pressurizing the Minister of Housing on his ministry’s plans for providing housing for the thousands of citizens on the waiting list , while each year thousands of other applications for housing are accumulating . Each housing unit built by the ministry « Housing »cost 40 thousand dinars, the loan that the government demands for Gulf Air with such haste and priority is capable of building 16,600 homes, which is able to solve the third of housing requirement in Bahrain ». The MP added «we have been asking for a small increase in benefits for retirees in the public and private sector, but the government always rejects this proposal claiming that there is a deficit in the budget, if that is the case, then why add a new major deficit?».
Abdel-Aal, concluded by saying: «I refuse to meet this demand, and if the house is true to its oath and pledge towards serving the citizens , then I am sure that the majority will reject it». It is noteworthy that the government referred to the House of Representatives last Thursday a bill to open an additional appropriation in the state budget for fiscal year 2012 and provides for the opening of an additional appropriation in the general budget of the state (BD 691.350.000 dinars), of which BD 664,350,000 will be allocated to support Gulf Air , while BD 27 million is allocated for project expenditure budget of the Secretariat of the Supreme Council for Youth and Sports for the purpose of covering the expenses of the building of a new sports stadium.
It is pointed out that the deficit resulting from the implementation of the additional appropriation is to be covered by the borrowing of funds from Arab and Islamic financial institutions.
Sunday 18th March 2012
Local Affairs Correspondent: Hassan Al Madhoob
(Translated from Arabic Text)
Khalid Abdel Aal, a member of the Parliamentary Committee set up to study the financial situation of Gulf Air's , declared that «the government wants to hand over the loan of BD 664 million to Gulf Air in just 25 days from the day of a request submitted to the House of Representatives late last week».
According to Abdel Aal, «through my discussions with the deputies, I think that most of them would refuse to agree to pass this loan so quickly and without the Government providing a feasibility study or define a commercial strategy in return to the parliament loan approval, and especially since the deputies had already agreed to pass the previous grant to Gulf Air, worth BD 400 million in less than a year ».
He added «up to now, there is no conclusive justification to persuade the lawmakers to approve the new loan, and especially since the government says there are no guarantees that such loan (BD 664 million) will lead to the transformation of the company into profitability ».
Abdel Aal, added «Ministers of Finance and Transport told us explicitly that there are no guarantees, and that the losses will continue, but they stated that the loan is important because the company's closing down will hurt the national economy!».
He pointed out that «since the company received the BD 400 million loan in less than a year; it has recorded losses of BD 200 million, and projected annual loss will range between 80 and 100 million dinars.” The MP continued “ is there any greater impact on the national economy than the losses suffered by the company?».
The member of the Parliamentary Committee continued «they (the government) want the parliament to approve the loan and deliver it to Gulf Air in a period of 25 days , while they had a whole month since the formation of the Parliamentary Committee, in which they did have some requests , but did not indicate to us their intention to request an additional appropriation to inject additional funds to the company. Despite the fact that we repeatedly asked them to provide us with all the details and plans related to the company’s recovery strategy, the government surprised the committee at our meeting last Thursday (March 15, 2012) by submitting this request during the meeting and without responding to our requests for information».
Abdel-Aal said «that is a deliberate move by the government to divert the blame on the House of Representatives , by putting us in the status quo with an ultimatum, either approve the loan and open additional credit facilities or the company will close down and the economy will suffer and the national unemployment number will increase in the process».
«the conditions of Representatives for approval of any adoption of additional financial aid package to the company, is quite clear to the government , which are : 1) the complete change of the Board of Directors , because they are part of the causes of the company’s losses, as well as executive management, 2) submission to the committee the current operational performance data of the company, and 3) clearly defined plans on when it will turn to profitability», Abdul Aal stressing «We are not against the survival of the company, But very much against the wastage of public money under the pretext of helping the economy ».
He continued to say «We are well aware that the problems are not caused by the new administration, as during the past 10 years, Gulf Air lost over 1 billion dinars, how long will it continue to lose? and if the argument for keeping the company is a national employment, then retirement program that encompasses handsome financial rewards for all Gulf Air national (local) staff , will not cost the company much more than BD 40 million».
He continued «the House of Representatives has been pressurizing the Minister of Housing on his ministry’s plans for providing housing for the thousands of citizens on the waiting list , while each year thousands of other applications for housing are accumulating . Each housing unit built by the ministry « Housing »cost 40 thousand dinars, the loan that the government demands for Gulf Air with such haste and priority is capable of building 16,600 homes, which is able to solve the third of housing requirement in Bahrain ». The MP added «we have been asking for a small increase in benefits for retirees in the public and private sector, but the government always rejects this proposal claiming that there is a deficit in the budget, if that is the case, then why add a new major deficit?».
Abdel-Aal, concluded by saying: «I refuse to meet this demand, and if the house is true to its oath and pledge towards serving the citizens , then I am sure that the majority will reject it». It is noteworthy that the government referred to the House of Representatives last Thursday a bill to open an additional appropriation in the state budget for fiscal year 2012 and provides for the opening of an additional appropriation in the general budget of the state (BD 691.350.000 dinars), of which BD 664,350,000 will be allocated to support Gulf Air , while BD 27 million is allocated for project expenditure budget of the Secretariat of the Supreme Council for Youth and Sports for the purpose of covering the expenses of the building of a new sports stadium.
It is pointed out that the deficit resulting from the implementation of the additional appropriation is to be covered by the borrowing of funds from Arab and Islamic financial institutions.
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Again, it is just beyond comprehension how much money needs to be pumped into this little airline with only about 30 planes to keep it afloat! It comes down to a cost of almost 20mln dollars per yer, per aircraft, to keep going?
There must be some sort of black (money) hole somewehere...
Try suggesting this kind of goverment support in Europe or the states!
To relate;
Spanair lost 461mln dollars over the last three years and folded in the end after 26 years of service. The Catalan goverment injected almost 200mln euro's into it since 2009. They had 36 aircraft, quite similiar to Gulf Air.
Malev with around 20 aircraft had a debt of 271mln dollars and was ordered by the court to repay a goverment loan (bailout) and debt deferrals of 455mln dollars it had recieved between 2007 and 2010. Only recently did it stop flying after 66 years of service.
This compared to Gulf Air's 2.82bln dollars worth of goverment loans over the last 2 years alone ( if this last one is approved) and a loss in the last 10 years of 1 bln dollars makes it a stagering story of 'survival'.
There must be some sort of black (money) hole somewehere...
Try suggesting this kind of goverment support in Europe or the states!
To relate;
Spanair lost 461mln dollars over the last three years and folded in the end after 26 years of service. The Catalan goverment injected almost 200mln euro's into it since 2009. They had 36 aircraft, quite similiar to Gulf Air.
Malev with around 20 aircraft had a debt of 271mln dollars and was ordered by the court to repay a goverment loan (bailout) and debt deferrals of 455mln dollars it had recieved between 2007 and 2010. Only recently did it stop flying after 66 years of service.
This compared to Gulf Air's 2.82bln dollars worth of goverment loans over the last 2 years alone ( if this last one is approved) and a loss in the last 10 years of 1 bln dollars makes it a stagering story of 'survival'.
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I am still at loss to explain how would two cabinet ministers, who are supposed to be part of the executive branch of government, professional, highly qualified, intelligent, experienced and responsible executives , ask for BD 660 million for an ailing airline without ANY plans on how this money is going to be spent and how would it transform the airline and return it to profitability or break even , at least.
This is a scandalous act even at the level of Bahrain Governance!!! Any such request in a civilized society and democratically run country will mean the end of the Minister's political career. A dignified Cabinet Minister will not dare to come up with such outrageous request without due diligence , meticulous and detailed study. This is simply astonishing.
In Gulf Air itself , a Manager who requests a small amount for expenditure , I believe in the excess of BD 150 , must justify it by submitting official document for approval by his superiors and through several layers. However , a staggering BD 660 Million does not seem to warrant a study be the government suffice to say it would be bad for the economy if the money was not given !!!!!!
This is a scandalous act even at the level of Bahrain Governance!!! Any such request in a civilized society and democratically run country will mean the end of the Minister's political career. A dignified Cabinet Minister will not dare to come up with such outrageous request without due diligence , meticulous and detailed study. This is simply astonishing.
In Gulf Air itself , a Manager who requests a small amount for expenditure , I believe in the excess of BD 150 , must justify it by submitting official document for approval by his superiors and through several layers. However , a staggering BD 660 Million does not seem to warrant a study be the government suffice to say it would be bad for the economy if the money was not given !!!!!!
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HMMMM.... Mike Alpha, it seems that they have indeed been studying the GF situation now since last December, and have been conducting audits, do your homework before posting...
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@theodorum.. Touchy, touchy.. Ther was no malice behind the comment dude, lighten up,Yeah people in greece are suffering.. So are people in india, bangladesh, indonesia, philipines.. Etc etc but unfortunately this lot does'nt have germany and the euro lot to pump billions of dollars into their economy. I wish not to enter a geopolitical debate and just lets leave it at that mate.
On a different not if bah government pumps millions in gulf air you and the rest of us get to keep our jobs and life style.. If not, tough sh@t mate, time and tide does'nt stop there. Ok think of gulf air as congo.. Hope you aint gonna lose sleep over it. A sense of humour goes a long way.
On a different not if bah government pumps millions in gulf air you and the rest of us get to keep our jobs and life style.. If not, tough sh@t mate, time and tide does'nt stop there. Ok think of gulf air as congo.. Hope you aint gonna lose sleep over it. A sense of humour goes a long way.
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Hey Bubs, what dya min by congo? In case you wunder whers are bin, are am inde congo playin me bongo doodas & tinkin of investin in ma CPL.
Ok, ferget it. Are will give me CPL munee to de poor kids in de street but are am keepin mar reeboks !
Ok, ferget it. Are will give me CPL munee to de poor kids in de street but are am keepin mar reeboks !