Bahrain plans to privatise national carrier Gulf Air as soon as possible encouraged by positive results in its restructuring, a senior government official said in remarks published on Sunday.

The loss-making carrier could return to profit within a year, paving the way for privatisation, the head of Bahrain's Economic Development Board, Sheikh Mohammed bin Essa al-Khalifa, told newspaper Akhbar al-Khaleej.

Gulf Air was established as a regional airline but has undergone years of restructuring after shareholders Oman, Abu Dhabi and Qatar gave up their stakes, partly to establish national carriers.

The emergence of regional heavyweights such as Dubai-based Emirates Airline has forced Gulf Air to revamp operations, cutting staff and refocusing its network on regional routes.

Sheikh Mohammed told Reuters in February that the company could be privatised within about a year.

Bahrain is a small oil producer that cannot afford to support a large public sector and has therefore launched a privatisation program.

Gulf Air is one of the single largest employers in Bahrain, where privatisations are opposed by most opposition politicians and the general public due to fears over job security.

Sheikh Mohammed told the newspaper that the government would not allow Gulf Air's return to profits and the subsequent sale to come at the expense of the 'Bahrainis involved'.-Reuters