Majali remains at the helm as debate over Gulf Air's future hots up

Gulf Air has denied that chief executive Samer Majali has resigned among the confusion and fierce debate over the Bahrain airline's future.

Finance Minister Sheikh Ahmed bin Mohammed Al Khalifa and Transportation Minister Kamal Ahmed have been calling on the Bahrain National Assembly to sanction a $1.76bn payment to ensure the survivial of the national carrier.

The appeal was made during a meeting between parliament and Shura Council members to discuss the challenges facing the airline and its technical, administrative and financial status.

In January Bahrain’s MPs voted in favour of making it obligatory for a Bahraini to hold the position of Gulf Air's chief executive officer.

The position is currently held by Samer Majali, the former head of Royal Jordanian and the son of former Jordanian prime minister Abdelsalam Majali.

Majali has been overseeing attempts to steer the airline back into profit, but has blamed regional political turmoil for derailing its recovery plans, particularly anti-government protests in Bahrain.

He also said the suspension of flights to Iran and Iraq compounded the problem, since they were major money-spinners for the carrier.

Bahrain newspaper Gulf Daily News reported last week that there has been strong rumours that Majali had resigned. This was fiercely denied by the airline.

Following the Bahrain Airshow in January the government announced it was conducting a full review into the future of the airline.

The government is said to be discussing four options, including dissolving the airline, selling it off and launching a new carrier, downsizing or allowing it to continue in its current form.

The subject has created massive division in Bahrain with economists and politicians supporting different options.

At Thursday’s meeting the ministers said an accumulation of local, regional and international factors had affected the airline's performance. They also stressed Gulf Air’s role with promoting and linking Bahrain around the world and employment opportunities it offers nationals.

One major call is for the government to reduce its holding in the company and allowing  Majali and his team to run the airline commercially. It is inevitable there will be job losses, one economist said. Majali has been critised in some government circles another economist said: "They only criticise the chief executive, but we have seen chief executives leave Gulf Air and go on to be hugely successful in other companies."

Majali had successfully introduced a cost-cutting programme and a restructuring which had been showing positive results. But with a ban on the airline flying to Iran and Iraq along with a massive increase in fuel costs and a dramatic drop in passenger numbers because of the political situation in Bahrain, the reversal was halted.

Article Source : Arabian Aerospace