Wednesday, February 27, 2013

Upheaval In Bahrain

The Airline sector has been simmering for the last year. Rumors of Gulf Air's CEO resigning were all over the place, until the Board accepted it in November 2012. There has been rumors of a merger between Bahrain Air and Gulf Air with Bahrain Air Taking over the helm (The Airline Scene In Bahrain and Bahrain, Merger In The Air).

As 2012 came to a close and the CEO has finally resigned, there was all this talk about right sizing the airline and getting a Bahraini national at the helm.

Then it all came to a head in February 2013, Bahrain Air went into voluntary liquidation amid veiled accusations of the government not allowing a bail out in favor of Gulf Air. On the other hand, Gulf Air right sized, letting 15% of its workforce go since the beginning of 2013. Neither the parliament nor the unions are happy. There are calls for getting rid of expatriates instead of nationals because the savings are better, but then there are essential jobs that are performed by expatriates.

As of today Gulf Air is struggling and Bahrain Air is history, with international carriers picking up the slack and making money.

This was not only economic forces at play but political high stakes among the ruling elites in government.

Gulf Air had to survive, the government has invested too much to keep the airline going. Besides it has won the third license to operate in Saudi Arabia.

So were do we go from here. Gulf Air does not have a CEO as yet and I am sure the Board is looking for one to get the airline from the mess it is in. Parliament wantsa a national to head the airline and less expatriates hired. Things should become easier for Gulf Air but they need to pay attention international carriers.

It took a year to get to where we are at today, it may take another 6 months before things clear up

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