Bahrain Air is reportedly being sued for at least BD2 million ($5.27 million) by the company responsible for providing its catering, cargo, engineering and other ground handling services at Bahrain International Airport.

The claim was lodged with the High Civil Court on Monday by Bahrain Airport Services (BAS), according to a source familiar with the case, according to a report in our sister publication, the Gulf Daily News (GDN).

It was lodged just under three weeks after the airline announced it was going into voluntary liquidation on February 12, when it immediately suspended all operations.

BAS officials have declined to comment on the lawsuit.

However, sources told the GDN that Bahrain Air had not paid BAS for its services "for years".

The carrier, which is said to have run up debts of more than BD17 million to the government, has blamed the "unstable political and security situation in Bahrain" since 2011 for severely damaging its business.

It highlighted instructions to suspend flights to key destinations, a lack of traffic to and from Bahrain as well as restrictions on the King Fahad Causeway as factors that significantly dented its revenues.

The airline also claimed authorities had reduced its scheduled operations, both destinations and frequencies, while demanding immediate payments on past government debts - making it impossible to continue operating.

Airline chief executive officer Richard Nuttall was unavailable for comment yesterday.

Employees to receive dues next week

Meanwhile, the airline’s employees will start receiving severance packages from the end of next week, according to another report in the GDN.

A total of 345 staff at the carrier are now unemployed after it went into voluntary liquidation last month.

Unionists told the GDN last week that staff were expected to receive 24 days' pay for every year they worked for the carrier, as well as compensation for their notice period and leave until the end of February 12, while expatriate staff will receive indemnity payments.

The Bahrain Air Trade Union (BATU) announced details of the package after meeting representatives of the liquidator, Mourad Consultancy, and said it was seeking an additional month for every year of employment.

Labour Ministry Under-Secretary Sabah Al Dossary yesterday said an official announcement on staff payouts would be made next week.

In a statement, he added that compensation packages would start being paid from the end of next week.

He also said that efforts were being made to reach a consensus on the size of severance packages without the matter going to court - adding that efforts would be made to find former employees of the airline new jobs.

His comments coincided with the second meeting of a special panel set up to resolve the issue of redundancy packages at the carrier.

The liquidator and representatives of BATU and the Bahrain Labour Union Free Federation were also present, although union representatives could not be reached for comment yesterday. – TradeArabia News Service