Bahrain’s national carrier Gulf Air has announced a voluntary redundancy and retirement scheme (VRS) for its employees aimed at improving efficiency at the cash-strapped airline.
The initiative is part of the airline’s new strategy to save the government about $2.65bn over the next five years.
Gulf Air CEO Samer Majali said: “A key part of our strategy is to review all cost elements of the business that have an impact on its sustainability and profitability.
“This included personnel-related costs. Offering a VRS was one of the suggestions put forward by employees and employee representatives to address this issue.”
He said the move had followed a series of consultations with the Gulf Air Trade Union (GATU) and the Ministry of Labour.
“While not all of the GATU’s demands could be fully met, many were taken into consideration and the VRS scheme was modified to accommodate their suggestions,” he added.
“Whilst we are conscious of the financial impact due to the high number of employees we have on our payroll, our main priority will always be, retaining the best and most productive talent, safeguarding the jobs of Gulf Air employees who continue to workhard for Gulf Air’s long term success and future.”
Majali said that despite the VRS, the airline was still committed to creating job opportunities for qualified Bahrainis.
Under the VRS, employees, who are Bahrainis or former-owner state nationals, who have worked for the company for a minimum of six months, are entitled to apply.
Employees, whose applications have been approved, will receive a compensation of one month’s salary for each completed year of service, three month’s salary as an ex-gratia payment and one month’s salary in lieu of notice period.
In addition they will also receive other benefits such as medical insurance coverage and staff travel benefits.
In November 2009, the carrier said it was to launch a more targeted network of routes, expanding its operations into more than 20 new destinations in the Middle East, Africa, Asia and Europe.
At the same time it will also suspend up to 15 other routes and close a number of overseas stations that are not profitable and no longer reflect customer needs.
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