In a world of globalization, speed and technology where everyone is seeking for ways to accomplish their duties easily, and where countries have been connected with each others by economical, commercial, and political affairs, airlines companies appeared as an integral part of the channel of transportation in different countries of the world which have been recently one of the most important ways to carry passengers and goods from a place to other distant places. Among those companies the Gulf Air Company was established in 1950, and since that time it has gone through many stages and conditions, until it reached within these years to a level of the need of restructuring; because of the sequence losses it has faced. As a company that owns the largest aviation network in the Middle East and as it carries a history of about sixty years, it is significant to figure out the main factors that lead it to reach to a loss that is equivalent to BD 190 million in only 2009. This loss is substantial and definitely has negative consequences on the entire Bahraini economy, since the Gulf Air is known as one of the most important ventures that provide employment for significant number of Bahraini population, and therefore have an effect on the Bahraini GDP. Hence things should be analyzed and problems have to be diagnosed in order to find out some hinders and drawbacks, and list some strengths and advantages to reach at the end to general beneficial conclusion.
1-History of Gulf air.
Since the establishment of the Gulf aviation company as a private shareholding company on 24 March in 1950 and it has gone through many changes and stages. First in October 1951 the British Overseas Aircraft Corporation (BOAC) became a major shareholder in Gulf Aviation, holding a 26% of shares, and handling the company administrative activities, until 1973 when they were purchased by Abu Dhabi, Bahrain, Oman, and Qatar governments. In the next year a foundation treaty was signed by those countries governments which gave each one of them a 25% shareholding in the re-branded Gulf Air, which became the national carrier for the four states in the Arabian Gulf with a capital that is equal to BD 28m. After this turning point the Gulf Air started expanding its activities in various fields starting with making trips to the Middle East countries, India, and Europe, and that was accompanied with adding the Tristar and Boeing 200-737s to the fleet. The year 1978 was a beginning point of the sequence losses that the Gulf Air faced as a result of previously done developments and expansions. The loss in that year reached to an amount of about BD 29m, and therefore the company was declared financially bankrupt for inability to pay its obligation which came as a result of overcoming the problem by increasing the amount of the paid capital. Hence the Gulf Air prepared a new plan to counter the problems associated with the previously occurred losses, by applying several steps like cutting unnecessary costs, and eliminating unprofitable trips, as well as following new and flexible promoting techniques while keeping service continuously in high levels. In 1980 the four states came to the conclusion of increasing their support to the Gulf Air by increasing its capital from BD 28m to BD 40m, which relatively contributed in improving its general conditions. In other stages several expansions and improvements were enhanced, when the company transferred from a regional aviation network to an international one that links between Asia, Africa, and Europe. In addition it was necessary in that time to work hard on preparing skilful national staff for different activities like maintenance, operating, and administrative activities. In the late seventies and early eighties of the last century the Gulf Air reached to a level where it was able to compete with international rivals which was as a result of the substantial improvement of its labors skills, in the other...
Please join StudyMode to read the full document