Bahrain Shoura Council approves $490m Gulf Air bailout

Carrier received the cash by Royal Decree in 2012, but the payment was not formally approved by parliament
Bahrain Shoura Council approves $490m Gulf Air bailout
By Beatrice Thomas
Tue 24 Jun 2014 10:11 AM

Bahrain’s Shoura Council has approved a BD185m ($490.71m) bailout for national carrier Gulf Air - two years after the money was allocated, Gulf Daily News has reported.

The carrier received the cash by Royal Decree in 2012, but the payment was not formally approved by parliament until a narrow vote in February - despite calls from some MPs to reject it in protest at the way the decision was made without their consent, the English newspaper reported.

However, on Monday the Shoura Council voted unanimously in favour of the bailout after receiving details on how the money had been spent.

If it had rejected the decree, the airline would have been forced to return the money.

“BD78.3m was spent to restructure the aircraft fleet, manpower and human resources; BD59.7m on ongoing loans; BD23m for late payments; BD23.7m for operational costs; and BD800,000 remained in the airline's coffers,” said council financial and economic affairs committee secretary Dr Abdulaziz Abul.

He reportedly added: “Gulf Air initially planned to spend BD59m on the aircraft fleet, but it reduced the amount to BD26.1m after negotiations.

“It also saved an additional BD46m after settling agreements with aircraft providers, who the company was leasing from. Two new Airbus A321s were also purchased at a cost of BD27.2m.”

Abul said the airline’s accumulating loans reached BD82.7m and were rescheduled for payment last year and this year.

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