Twenty days after Mumtalakat (the investment arm of the Kingdom of Bahrain) returned the ownership of Gulf Air to the government, citing that an airline is a strategic asset that will yield very little return. The government on 25 February 2010 announced its intention to privatize the airline within one year. Well, I don’t think it will happen. Although Bahrain Air is not a major threat, carriers in the region are. Gulf Air has a few advantages:
- It has a restructuring plan and a vision of where it is heading
- It has a fleet renewal plan which is in progress
- It has several code sharing agreements within the region and as far afield as North America.
On the other hand it has definite problems and disadvantages:
- Allegation of corruption within the airline
- No record of profitability
- A very disruptive labor union
- A potentially explosive geopolitical situation
