Bahrain Air "seriously" considering merger - MD
By: Claire Valdini
Bahrain Air, the Gulf kingdom’s second carrier, is "seriously" considering a merger with local competitor Gulf Air, managing director Ibrahim Al-Hamer told Al Watan newspaper.
Al Hamer’s comments came a week after Gulf Air’s CEO, Samer Majali, said the country cannot afford two carriers.
Bahrain Air and Gulf Air have been struggling to compete against GCC rivals amid rising fuel prices and declining passenger numbers. Both carriers were also hit hard by last year’s regional political instability.
Gulf Air, which once had the biggest network in the Gulf, has axed several routes from its network in recent months as it moves to stem its losses.
Mumtalakat, Bahrain's US$9bn sovereign wealth fund which owns a stake in Gulf Air, said last month that losses from the struggling national carrier weighed on its 2011 income.
“Several restructuring initiatives were undertaken at Gulf Air to reduce operating losses, achieve cost efficiencies and improve the quality of product offering and customer service,” Mumtalakat said in a statement.
Bahrain Air’s CEO Richard Nuttall in a March interview with Arabian Business said he would be open to a merger. Nuttall said there was an urgent need to solve the problems that both loss-making airlines face, and that a deal between the two carriers had a lot of support in the country.
“We are very open to merging with Gulf Air, and can see a number of synergies,” he said.
“It’s no secret that Gulf Air, Bahrain Air and most airlines in the region are hurting. If we come together we can rationalise and be that much more efficient with less cost. It is certainly an option we would be interested to pursue.”
A merger would also enable both airlines to expand their existing network of routes amid a limited number of traffic rights available, he added.