Financial Daily from THE HINDU group of publications
Wednesday, Sep 14, 2005
Financial Daily from THE HINDU group of publications Wednesday, Sep 14, 2005 |
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Airlines Government - Policy Abu Dhabi Govt to withdraw from Gulf Air partnership Vimala Vasan
Abu Dhabi , Sept. 13 IN a major development in the Gulf airline industry, the Abu Dhabi Government announced here on Monday that it has decided to withdraw from its partnership in Gulf Air, according to the official Emirates news agency WAM. An official source said the decision was taken to concentrate efforts on developing the new Abu Dhabi Government-owned airline Etihad Airways. "The Abu Dhabi Government will work with its earlier partners in Gulf Air to finalise the withdrawal procedure," the source was quoted as saying by the agency. The confirmation from the Abu Dhabi Government comes after a couple of days of speculation, when agency reports from Manama cited company sources as saying that Abu Dhabi may exit the debt-ridden airline. The reports also indicated that Gulf Air might go in for privatisation or a public share offering. Gulf Air was originally co-owned by Abu Dhabi, Oman, Bahrain and Qatar. Qatar withdrew its partnership in 2002 to concentrate on its own national carrier. The Gulf Air President and Chief Executive, Mr James Hogan, earlier on Monday said, in a statement, "From a commercial point of view, we will continue business as usual. There will be a board meeting later this week after which we will provide an update on any relevant issues." Gulf Air posted profits in 2004 after many years of losses. The Gulf states had invested millions of dollars to keep the airline running. Gulf Air said in April that it had reduced debt by 7.8 per cent to $110.6 million and that the debt to equity ratio was 2.4 times below a limit of three set under a three-year restructuring plan approved in 2002, according to the agency report from Manama.
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