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Mon 27 Aug 2012 11:17 AM

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Bahrain Air told by gov't to pay off debts

Chairman says government has threatened to suspend carrier if dues are not paid

Bahrain Air told by gov't to pay off debts
Bahrain Air

Bahrain Air, the Gulf kingdom’s second carrier, has been ordered to pay off its debts or risk suspension of its operations, its chairman has said.

The Manama-based airline has failed to pay arrears owed to the Civil Aviation Affairs and other government parties, the Bahrain News Agency reported on Monday.

“The airline company has also failed to pay the passenger departure taxes it had levied for a long time on behalf of the government”, the Transport Ministry said.

In a statement carried by Arabic daily Akhbar Al Khaleej, Sheikh Mohammed bin Abdulla Al Khalifa, chairman of Bahrain Air, said the airline has come under increasing pressure to pay off debts accrued in the wake of last year’s political unrest.

Sheikh Mohammed bin Abdulla Al Khalifa said the airline had been threatened with suspension and claimed it had not been granted approval for additional flights.

Bahrain Air, along with its competitor Gulf Air, has been struggling to compete against its rivals amid rising fuel prices and declining passenger numbers. Both carriers were also hit hard by last year’s regional political instability.

The carrier last week said it was working on a deal with its creditors after returning to profitability in June and July.

“We are currently putting every effort to reach an agreement with our creditors for the restructuring of our debts that accumulated as a result of the unfortunate events that took place in Bahrain and the region,” said CEO Richard Nuttall.

“We are optimistic of our ability to improve our performance further in the coming months in the hope of continued stable economic, security and political conditions and receiving the required co-operation and support to our commercial operations from the authorities concerned,” he added.

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