Struggling Gulf Air announces job cuts as unions reject revamp
By Ali Khalil, AFPDUBAI -- Bahrain's loss-making flag carrier Gulf Air, struggling against competition from other regional carriers, has embarked on a sweeping restructuring plan that has annoyed unions over heavy job cuts.
March 4, 2013, 9:18 am TWN
The company said this week it had sacked 15 percent of its staff and closed four more routes in January as it pressed ahead with a restructuring plan that it launched a month earlier.
The carrier, one of the Gulf region's oldest airlines, has been struggling to cut losses mounted by stiff competition from fast growers like Dubai's Emirates, Abu Dhabi's Etihad and Qatar Airways, as well as rapidly expanding budget airlines like flydubai and Air Arabia.
It has also been hit by the kingdom's political and security uncertainty that took a heavy toll on the economy due to Shiite-led protests that erupted in February 2011, and continue despite a deadly crackdown in March of the same year.
Gulf Air was established in 1974, with Abu Dhabi, Oman and Qatar partnering with Bahrain. By the early 1990s, it had become the largest Middle East carrier.
But its star shone only briefly. By the middle of the decade, it started to lose ground because of an economic downturn in the oil-producing region and competition from new carriers.
Bahrain's erstwhile partners divested and focused on building their own airlines, leaving Manama to bear the losses.
A number of chief executives have been successively hired to restructure the carrier, including former Royal Jordanian chief Samir al-Majali who resigned just months ago after failing to replicate his success in revamping Jordan's flag carrier.