Bahrain's Gulf Air was struggling well before the Middle East caught fire in 2011, but the pain is now starting to show. Bookings have fallen by 25 per cent so far this year, and the company has laid off 200 staff in response, the airline said in a statement on Monday.
A year of uprisings across the Arab world has been cruel to the smaller players in the region's airline industry, accelerating the inevitable process of consolidation driven by the emergence of three of the world's fastest-growing carriers - Etihad, Emirates and Qatar Airways - in a fairly small neighbourhood. In mid-March, Kuwait's Wataniya Airways, a niche player targeting luxury travel between Gulf cities, closed down. Weeks later, Jazeera Airways, a Kuwaiti budget carrier, said it was cancelling orders for 25 new Airbus A320s.
With the three big Gulf superconnector airlines wreaking havoc on the business models of some of the world's best-established airlines, it is no surprise that they are also causing headaches for the second-tier players in their home region, where all major airports are within an hour's flight to the hub cities of Dubai, Doha and Abu Dhabi.
Gulf Air is the first of the flag-carriers to announce difficulties, but it won't be the last. The long-delayed privatisation of Kuwait Airways still drags on, and finding a buyer interested in running the carrier as a commercial proposition in competition with its super-competitive neighbours will not be easy. And privatisation of Saudi Arabian Airlines, the Saudi national airline, has been in the works since 2006; the company said on Sunday that it expects the process to be completed by 2013. Fingers crossed.
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