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Qatar pulls out of Gulf Air

Qatar, one of the strategic equity shareholders of Gulf Air, has pulled out, adding further to the woes of the losing airline but Abu Dhabi, Bahrain and Oman have affirmed their commitments and will inject 30 million Bahraini dinars immediately to help the airline tide over the crisis.

Gulf News

Qatar, one of the strategic equity shareholders of Gulf Air, has pulled out, adding further to the woes of the losing airline but Abu Dhabi, Bahrain and Oman have affirmed their commitments and will inject 30 million Bahraini dinars immediately to help the airline tide over the crisis.

The legal implications of Qatar's withdrawal will be studied in detail as Qatar refused to inject the required cash for Gulf Air, top officials said, adding that the three remaining partners will now hold equal equity in the airline.

Gulf Air has an authorised capital of 135 million dinars. "Qatar has withdrawn from Gulf Air but the three others will continue to support the airline and have committed to inject 30 million dinars equally to keep the airline going," said Sheikh Hamdan bin Mubarak Al Nahyan, Chairman of Gulf Air, after a five-hour meeting of the board in the capital yesterday.

However, the chairman expressed optimism that the airline will come out of the red with a new restructuring plan to be presented by the newly appointed chief executive by the end of August.

"The study undertaken for restructuring the airline will include different options to increase the profitability of the airline such as adding new routes, closing some unprofitable routes," he said.

The total debt of Gulf Air currently stand at around $800 million, said Sheikh Hamdan. "All airlines have debts," he responded when asked why the airline's debts were so high.

About Qatar refusing to inject the much-needed cash for the airline and pulling out as an equity partner, the chairman said, "the complete legal implications on the withdrawal will be studied within three months."

Similarly, a decision will be taken in three months about further contribution by the three other partners to provide a safety net for the airline.

Gulf Air has performed "better" in the first quarter of 2002 and "we are confident this year will be a good year," he said, adding that while it is sad that Qatar has pulled out, the other partners respect its decision.

Gulf Air has a fleet of 30 aircraft currently. "There are no plans to acquire more aircraft for the time being," said a senior official of the airline. The airline suffered a net loss of around 40 million dinars for year 2001, compared to 37 million dinars in 2000.

Upto now, Gulf Air was owned equally by the governments of Bahrain, Abu Dhabi, Oman and Qatar with the latter two having their own airlines.

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