Airline Facing Liquidation, Blames 'Political Unrest'

The Middle East is often mentioned as a high-growth region for airline traffic, with carriers like Emirates, Etihad Airways, and Qatar Airways reportedly doing quite well. But those are all state-owned companies that are expanding into global airlines.

Bahrain Air, on the other hand, has been struggling, and Wednesday the carrier parked its four planes and said it will liquidate its assets.

The carrier said that the country's "political unrest" was the at the root of its problems, according to a report appearing on Reuters. Airline officials said that the government refused to pay compensation promised by the government after it put down a pro-democracy movement that took a toll on tourism.

Bloomberg News reports that private airlines in the middle east often are unable to compete with state-owned entities. In the case of Bahrain Air, that government-sanctioned competitor is Gulf Air. Saj Ahmed, an analyst with StrategicAero Research told Gulf Business that the government in Bahrain is trying to breathe new life into Gulf Air, "at the expense of facilitating growth for Bahrain Air." He said that any independent airline would struggle given those circumstances.

FMI: www.state.gov/r/pa/ei/bgn/26414.htm