Gulf Air cancels four ‘underperforming’ routes

State-backed airline will abandon services to Damascus, Athens, Milan and Kuala Lumpur
Gulf Air cancels four ‘underperforming’ routes
Gulf Air
By Will Milner
Tue 14 Feb 2012 05:23 PM

Gulf Air, Bahrain’s flag carrier, has said it will cancel flights on underperforming routes from next month, citing commercial reasons.

The state-backed airline plans to abandon its services to four destinations, Damascus, Athens, Milan and Kuala Lumpur, in view of difficult economic circumstances and the ongoing regional unrest.

It also alluded to the high price of fuel and low passenger numbers as reasons behind its decision. 

“It is currently a challenging business environment for airlines around the world, [and] these closures are pragmatic commercial decisions aimed at focusing services on routes with higher passenger traffic,” said the firm’s CEO Samer Majali.

“Our commercial strategy, developed in 2009, delivered significant gains in 2010 but last year has been challenging. Therefore, we are now adapting our approach to address the challenges on an urgent basis.”

Services to Damascus will be stopped from March 2, while flights to Athens and Milan will discontinue as of March 12, the airline said. Kuala Lumpur operations will cease from March 25.

Gulf Air has been struggling to maintain profits since early last year, when passenger numbers dropped amid anti-government protests.

In May, the carrier said it had laid off some 200 members of staff, and that bookings down by a quarter as the country grappled with the Arab Spring.

The struggling airline announced in January this year it planned to shrink operations and seek cash from government funds, including Bahrain's sovereign wealth fund Mumtalakat, which has a stake in the carrier.

Earlier this month, it announced the closure of Entebbe and Geneva routes, as part of its downsizing plan.

Local media also reported that the government was also considering dissolving the airline, or selling it and creating a new one for a price of BD460m ($1.22bn).

But hopes were raised when the company secured an $80m loan this week from a unit of Mashreq Bank in Dubai, which was aimed to help it meet its working capital requirements.

Mashreq Bahrain was said to be providing the loan, but no details were given on the nature of the finance or price.

Today marks the first anniversary of the pro-democracy uprising last year, which was quelled by the Gulf state.

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