MANAMA, 13 September 2005 — The government of Abu Dhabi plans to pull out of Bahrain-based Gulf Air, becoming the second partner after Qatar to do so, an airline official said yesterday.
“The emirate of Abu Dhabi officially requested two days ago to withdraw from Gulf Air. The company’s board of directors will convene at the end of the week to discuss Abu Dhabi’s decision and its likely effects on the company,” the official told AFP, requesting anonymity.
Qatar pulled out of Gulf Air in May 2002, leaving Bahrain, Oman and Abu Dhabi - the largest and wealthiest member of the seven-strong United Arab Emirates (UAE) federation - to try to bail out the cash-strapped company.
Gulf aviation analysts at the time traced Gulf Air’s troubles to the launch by Oman and Qatar of their own carriers - Oman Air and Qatar Airways. Oman and Qatar stayed in Gulf Air even as it saw passengers dwindle.
Abu Dhabi has since set up its own airline, Etihad Airways, adding to the competition faced by Gulf Air, which also has a major rival in Dubai’s Emirates airline. Dubai is, like Abu Dhabi, part of the UAE.
Bahrain is now the only one of the initial Gulf Air partners not to have another carrier. Gulf Air President and Chief Executive James Hogan said in a brief statement that Abu Dhabi’s move was dictated by purely commercial considerations, and it would be discussed during a board meeting later this week.
Gulf Air, which covers some 50 cities in more than 30 countries, notched up debts of $700 million to the end of 2002, forcing its co-owners to pump in $238 million and defer debts.
It launched a three-year strategic recovery program in 2003 under the direction of Hogan, an Australian former airline CEO in Australia and Britain who took over the previous year.