February 13, 2013 Bahrain Air shuts down
Bahrain low cost carrier Bahrain Air shut down operations this morning with plans to liquidate assets. The privately owned airline operated a fleet of 4 A320 aircraft with service to a dozen destinations. Operating since 2008 the carrier has been competing with state owned Gulf Air. Bahrain Air’s CEO cited government favoritism of Gulf Air as one of the root causes of Gulf’s liquidation.
In the era of more competition Bahrain’s liquidation, is just another question mark about the role of airline state ownership. Other states in the Middle East, Saudi Arabia and Kuwait have both looked into privatizing their state run carriers. Certainly state run carriers have less of a profit motivation than pure private companies such as Bahrain Air, but they come with their own problems. Air India a part state owned carrier has suffered from years of government miss-management and is currently barely clinging to life.
Certainly governments getting out of the airline business is a good thing, but it doesn’t fair well for the carriers who too often are ill-equipped to deal with the free market world of air transport.