What is Gulf Air?
The national carrier of the Kingdom of Bahrain and was established in 1950.
What is the company’s latest loss?
It reached 77 million dinars (about $ 204 million) in 2021.
What threats does the company face?
Consequences of the Russian occupation of Ukraine.
Although all airlines in the world have suffered heavy losses as a result of the effects of the “Corona virus” since the beginning of 2020, including Gulf airlines, some of which are considered the best in the world, the losses of Bahrain Gulf Air Company. were just a link in a chain of losses spanning many years.
On Saturday (April 23, 2022), the Bahraini Ministry of Transport and Communications announced that the losses of Gulf Air, Bahrain’s national carrier, amounted to 77 million dinars (about $ 204 million) in 2021.
Gulf Air losses amounted to 38 million dinars ($ 100.6 million) in 2019, compared to 91.9 million dinars ($ 243.3 million) in 2020.
The company was able to adjust to volatile conditions and reduce its current losses in 2021 to 77 million dinars ($ 203.9 million), compared to the 122 million dinars ($ 323.1 million) expected during budget preparation.
She explained that the Corona pandemic had changed the world and had greatly disrupted air travel; That led to the bankruptcy or restructuring of several companies around the world, and Gulf airlines experienced the worst crisis in their history.
The Ministry confirmed that Gulf Air is constantly working to increase revenue and reduce costs, and has prepared a plan aimed at reducing losses and improving revenue, in addition to developing its performance last year, by 63% compared to the approved budget for 2019. and an expectation of 43% compared to the approved budget for 2021.
Bahrain national carrier
Gulf Air is known as the national carrier of the Kingdom of Bahrain and was established in 1950 and its first flights were directed to Doha and Sharjah.
One year after the founding of Gulf Air, the British Overseas Aircraft Corporation (BOAC), in October 1951, became the main shareholder of Gulf Air after buying a 22% stake.
During this period, the number of Gulf Air aircraft increased and its flight network expanded to include Abu Dhabi, Al Ain, Kuwait, Muscat and Sharjah.
In 1973, four Arab countries bought the shares of the British Aircraft Company Overseas (BOAC) in Gulf Air: the Kingdom of Bahrain, the United Arab Emirates, the Sultanate of Oman and Qatar.
The following year, the countries signed the founding treaty, according to which each country was given a 25% stake in Gulf Air, and thus Gulf Air became the national carrier of those countries.
Gulf Air expanded its network in 1976 and between 1977 and 1978 renewed its short-haul fleet using 9 Boeing 737-200 aircraft.
In 1985, the company began cutting its services in the Emirates of Dubai and as a result, Emirates Airlines became a competitor.
Gulf Air began in 2002 with a restructuring plan, due to declining profits and rising debts.
Gulf Air partners had injected $ 238 million into the company, which in 2001 lost about 52 million Bahraini dinars, or approximately $ 138 million.
In the same year, Qatar announced its intention to withdraw from Gulf Air, but remained a member for six months after that announcement.
In the same year, the United Arab Emirates announced its withdrawal from Gulf Air; To create its own airline.
In 2002, Gulf Air achieved sales of 340 million Bahraini dinars, or approximately US $ 902 million, but was accompanied by a loss of US $ 110 million.
In 2007, the Sultanate of Oman withdrew from Gulf Air, becoming wholly owned by Bahrain in November of that year.
In 2013, the company restructured to respond to losses it had suffered in the previous ten years, reducing its capacity, disbanding one-third of its fleet, ending several aircraft lease agreements, reducing its network and continuing to record hesitation in its results. .
In announcing its results, the company said it reduced its losses in 2015 by almost 40 million Bahraini dinars ($ 106 million) – from 62.7 million dinars ($ 166.3 million) annual losses in 2014 to 24.1 million dinars ($ 63.9 million) in 2015 – equivalent to a decrease of 62%.
In a statement from the Ministry of Transport and Communications (Bahrain Mumtalakat Holding Company) in 2017, it said that Gulf Air is the company that generates the most revenue from Bahrain Mumtalakat Holding Company.
She stressed that “loans have been borrowed to finance its losses, and the inclusion of the revenues of Bahrain Mumtalakat Holding Company in the general state budget will lead to the inclusion of expenses of all its subsidiaries, and this will not to be in the interest of the general budget ”.
Economic scholar Wissam Al-Kubaisi said in an interview with Al-Khaleej Online that most economic sectors have suffered from the outbreak of the Corona epidemic, but some sectors have borne the brunt of the responsibility as a result, and airlines rank among the most affected.
Restrictions imposed by the Corona crisis on people caused a reduction in passenger traffic, especially for travel for commercial or tourist purposes, which was reflected in airlines, which had to offer alternatives in this compelling circumstance; Pay dues, monthly salaries and periodic maintenance costs, according to Al-Kubaisi, noting that this has increased the financial suffering of this sector.
Observers agree that the ongoing war between Russia and Ukraine is a threat to the airlines and that it could add more losses to Gulf Air, which is already suffering losses.
This is also confirmed by Wissam al-Kubaisi, who says that it is amazing that with the improvement of the health condition and the relative improvement of the passenger traffic in the last months, a new crisis has entered, represented by the Russian-Ukrainian war.
According to al-Kubaisi, this war led to a very large increase in fuel prices, which absorbed the profit margins gained from the recent increase in domestic and foreign aviation activity.
Airlines in the Gulf countries naturally faced the same fate and were greatly affected, especially since most of these companies, as a result of their geographical location, depend on their activities for temporary traffic between the four corners of the earth, says al -Kubaisi.
He added that the foreign workforce represents a significant segment of aviation activity, to and from the Gulf countries, but the Corona crisis led to its decline; Resulting in doubling the losses of these companies.
He said: “With this, if we exclude the Bahraini Gulf Air company, which may face bigger problems in the foreseeable future, the rest of the Gulf companies will be able to absorb the effects of these crises and gradually “Recovers, especially according to reports, and Indicators expect a significant increase in trade and tourism movements with the onset of summer.”