Bahrain’s Airline Instability Grounds Staff Credit Cards
Bahrain’s national flag carrier, Gulf Air, has been in financial trouble for years, while its much smaller national counterpart Bahrain Air has been struggling since it launched in February 2008. Both airlines struggle against larger, more powerful, mainline airlines and low cost carriers, battling with the Bahraini Government for bail outs, despite Gulf Air pledging to not take any more government money … before taking US$1,000,000,000 from the government … leading to Gulf Air once again announcing they will be ‘right sizing’ the airline in January and Bahrain Air filing for bankruptcy on the 12th of February.
As Bahrain Air weighs the options of restructuring or selling off its assets, and Gulf Air plans to lay off more than 1,000 employees, global credit card provider Creditmax has stepped in and taken steps to reduce its financial liability. Creditmax has frozen the credit cards for all of Gulf Air’s expatriate employees as and the remainder of all of Bahrain Air’s staff.
While Bahrain Air is no longer flying, the freezing of all cards issued to Gulf Air’s expatriates leaves the airline in a precarious position, impacting its flights crews traveling internationally and reducing the staff’s confidence in their employer. At this time, when Gulf Air is seeking to make massive cuts, while retaining the best and brightest to rebuild their failing carrier, those who the carrier would prefer to retain are more than likely looking to take their skills elsewhere, to a more stable airline.
Creditmax’s decision to freeze the credit cards of those employed by Bahrain’s two airlines was enacted out of fear of a mass former staff exodus from Bahrain. Shutting down the cards of thousands of employees was to reduce the financial liability of those who have lost their jobs racking up large debits leaving the country at their former employers expense.
Creditmax will reactivate the credit cards of Gulf Air’s staff, provided they can prove they are currently employed with the airline.
Both airlines indicate their financial problems are related to the political situation within Bahrain, with Bahrain Air stating their decision to file bankruptcy and cease flying is due to the Government not bailing them out.
As both airlines flounder among their larger immediate rivals, with one being cut up and cast off as chum, the bigger question looms of how long can Gulf Air survive and will the airline’s management and the Bahraini Government allow it to succeed?
Happy Flying!
