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CONFLICT OF INTEREST SEEN

Bahrain Air faces operations deadline

Manama, February 4, 2013

Bahrain Air’s operational licence, which was issued by Civil Aviation Affairs five years ago, expires today and has not yet been renewed, putting the airline in the risk of having to ground its entire fleet, said its CEO.

Richard Nuttall told our sister newspaper the Gulf Daily News (GDN) that the airline had two months to obtain new airline accreditation and if none was forthcoming, it would have to suspend all its flights.

Nuttall explained that Bahrain Air was still able to continue operating services until the end of March, which is when its Air Operators Certificate (AOC) also expires.

He said the airline - which celebrated its fifth anniversary yesterday - only acquired its new AOC two weeks ago after a full audit, but claimed its duration was limited because it owed BD1.7 million ($1.39 million) in departure tax.

The GDN reported on May 25 that Bahrain Air also had an outstanding fuel bill of $20 million, while Gulf Air owed Bapco $173 million.

It was announced by then Energy Minister Dr Abdulhussain Mirza in parliament, where both airlines were warned that from July 1 they would no longer be supplied fuel on credit.

"We have our AOC, which allows us to operate for a couple of months and it will expire by the end of March," said Nuttall.

"To get the AOC, the airline has to go through a full audit. We had the audit recently and passed allowing us to fly based on the audit. Usually, on an international level, the AOC is given for one year - but we have only been given two months and there is no airline related-reason to not give us the full year. We feel that we are being discriminated against by the civil aviation authorities."

Civil Aviation Affairs falls under the umbrella of the Transportation Ministry, which is headed by Minister Kamal Ahmed - who is also Economic Development Board (EDB) acting chief executive and a board member at Gulf Air.

Nuttall argued this meant there was a conflict of interest.

"We have a minister who is on the board of our competitors," he said. "I bring it up because we (Bahrain Air) are being singled out and our air traffic rights are being cut.

"We have been singled out for a while, as we have made numerous charter requests during the peak seasons and all have been refused, while Gulf Air and other international carriers have been approved."

He claimed Bahrain Air had lost up to BD4 million over the past three months alone because its requests to put on extra charter flights at peak periods, such as during the Gulf Cup last month and Eid, had been refused and its flight frequency and destinations were being limited.

"We had the football recently and wanted to help in the transportation of fans, but that was refused and the extra routes were given to international carriers locally," he said.

"It also happened during Eid and a few other events in the country that we could have profited from with extra routes. The BD4m lost is just through not being given our flight permissions, which also affected flights to Dakar, Thiruvananthapuram, Dammam and Khartoum - not to mention the flight reductions to Kathmandu and Amman.

"By refusing our additional routes and permissions they have reduced our ability to make money."

He alleged the airline's operations were being restricted by authorities as a penalty for delayed payment of departure tax.

However, he argued the airline should be encouraged to make money so that it can settle its outstanding debt.

"They (Civil Aviation Affairs) say they want us to pay back the departure tax we owe, which is BD1.7 million," he said.

"But we need to be able to make money to pay them back and by cutting out routes, we won't be able to. We are asking for a little leniency on their side so we can continue as normal.

"We incurred large losses as we were asked by authorities to stop flying to certain destinations (Iran, Iraq and Lebanon) because of security in 2011, which all add up."

Nuttall added the airline would cover its losses through shareholder cash injections, but this meant payments to suppliers would be suspended.

Talks are now underway with authorities to resolve the situation, but Nuttall said if the matter was not resolved in two months the carrier would not be able to fly.

"No airlines in the world can fly without an AOC and you cannot be a national carrier without it," he said. "The operational licence was issued to us about five years ago.

"As I understand it was a requirement to get the Commercial Registration, but with only the operational licence other countries will not allow you to enter - you have to have the AOC.

"The AOC is issued after a team of auditors from the Civil Aviation Affairs go through a list of 150 points as a test, which is a pass or fail test, and we passed - but the issue is that it was only given for two months."

Transportation Ministry and Civil Aviation Affairs officials were unavailable for comment yesterday. – TradeArabia News Service




Tags: Gulf Air | Civil aviation | Bahrain Air |

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