Bahrain Air to file for liquidation amid rising debt
14 February 2013
Bahrain's privately-owned airline, Bahrain Air has grounded all its fleet yesterday and said that the company intends to file for voluntary liquidation due to financial losses as a result of volatile political situation in the Gulf state.
''Bahrain Air held an extraordinary general meeting today at which the shareholders made the decision to announce the company's immediate suspension of operations and to file for voluntary liquidation in accordance with the Kingdom of Bahrain's commercial companies law," the airlines said in a statement.
Bahrain Air turned out to be latest victim of the political turmoil in the small Gulf kingdom over the last two years as pro-democratic forces protested against the ruling class, which affected many businesses particularly in the country's travel and tourism sector.
Bahrain Air sustained substantial losses during the state's emergency in 2011, as it was ordered to suspend several flights and also suffered from the lack of traffic to and from Bahrain. Moreover, the company said that it has not received any compensation declared by the government for affected parties.
Bahrain Air is required to pay its government debt and at the same time to operate on reduced destinations and frequencies, which ''effectively strangles'' the airline, the statement said.
Bahrain Air, established in 2008 as a low-cost airline, changed to a full service model in 2010 competing with much larger state-owned rivals in the region: Dubai's Emirates, Abu Dhabi's Etihad Airways, Qatar Airways and Bahrain's own Gulf Air.