Gulf Air's only hope is a fresh start, with its debts paid, new capital from the owning states and new management, says an aviation industry veteran.
If not, it should be dissolved and Bahrain should start its own airline, as other owning states have done, said Jamil Wafa.
Wafa is Unitag group chairman and chief executive and World Travel Service chairman, with 50 years in the aviation industry.
His comments came shortly before Gulf Air acting chairman Shaikh Hamdan bin Mubarak Al Nahyan told the media that the airline's owning states would soon decide on an injection of Dh1 billion ($272.5 million) into the firm.
Shaikh Hamdan said the money would increase the airline's capital and help cover previous losses.
"Bahrain pioneered Gulf Aviation, the forerunner to Gulf Air and may not welcome the idea of having its own airline," he said.
"But the kingdom should think of taking this painful decision, as the airline which was once the envy of other international carriers is now bleeding to death."
Current moves to rescue Gulf Air, by bringing in specialist consultants and pumping in an emergency cash injection, will not do the job, said Wafa.
"What is required is not just cash injection, but recapitalisation. The management should think of starting all afresh," he said.
US-based consultancy firm Simet Hellielson & Eicher (SH&E) has been brought in to spearhead the rescue, which includes the appointment of an interim chief executive officer.
"The current president and chief executive Ibrahim Al Hamer was not given a chance to fulfil the needs of running an airline, which he inherited with acute problems and I feel he is the victim of politics and the constraints and circumstances of the market condition," said Wafa.
The real problem started, said Wafa, when other owning states launched their own airlines.
"When Oman, Dubai and Qatar started their own airlines, it resulted in the revenue being diluted," he added.
"The irony was that the member states, while running their own airlines, also maintained their equity in Gulf Air. This was a dangerous trend, because the minutes of Gulf Air meetings had been infiltrated to the advantage of individual airlines.
"The leakage of information on key decisions affecting the future of Gulf Air had helped the other Gulf airlines to use it to their advantage."
The best way to save the airline, said Wafa, is for the owning states to write off the airline's huge debts and inject new capital.
"If the Gulf Air owning states fail to take such a bold step, it is ideal to dissolve the airline. Both Bahrain and Abu Dhabi should then take the painful decision of starting their own airlines, which could also flourish like others by enforcing proper bilateral agreements," he said.
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