Bahrain Air files for voluntary liquidation

Bahrain Air has filed for voluntary liquidation, following an extraordinary general meeting of shareholders.

The airline placed the blame for its collapse on the Bahraini government.

In a statement by CEO Richard Nuttall, it said it had never been compensated by the Bahraini authorities after being ordered to cease flights to several of its most profitable destinations during the inter-community unrest in the island state in 2011. It had to stop flying to Iran, Iraq and Lebanon after Shi’ite supporters in those nations openly supported the Shia population’s demonstrations against the Sunni-based Bahraini government.

This had led to considerable financial losses, said Nuttall. “Despite the Royal Decree number 18 for 2011 Article 5/10 that regulates land, sea and air transportation during Bahrain’s State of National Safety stating that all affected parties will be fairly compensated, the airline, despite making official claims, has received no compensation.”

Bahrain Air “is now being required to make immediate payments on past government debts or face closure at the same time as having its scheduled operations, both destinations and frequencies, being reduced considerably by the Civil Aviation Affairs in the Ministry of Transportation.

“This effectively strangles the airline by simultaneously requesting payments and reducing its ability to generate the necessary revenues both to make these payments and to sustain long term profitability.”

Bahrain Air had tried to negotiate a solution with the Minister of Transportation – who, noted Nuttall, is a board member of national flag-carrier Gulf Air – but only “minor route concessions” had been offered in return for payments of BD4 million ($10.6 million)
“In the circumstances, given the position of the Minister, the shareholders decided that had no option but to discontinue financial support and put the company into voluntary liquidation.”

All flights have ceased and passengers have been informed they will have to make alternative arrangements.