A number of members of parliament of Bahrain have been seeking to veto a royal decree to grant BHD185 million or USD490 million bailout of its national flag carrier, Gulf Air. The veto would cause major embarassment for King Hamad and his government, as the decree was approved during a parliamentary process.
Since the funds have already been transferred to the airline, the veto would be at most symbolic in nature. The money had been approved last October and was granted on the condition that a major restructuring be undertaken, such as cutbacks in staff numbers as well as the number of seats being scaled back.
The airline had recorded a decline in losses amounting to 50% for 2013. This climb from lethargy was helped by the protectionist policies instituted by government, which were blamed for the closure of Bahrain Air last February.
According to the Gulf Daily News, the opposition to the bailout was due to MPs being bypassed as it was approved during a parliamentary break. The vote was set for Tuesday but GDN said it was unclear if the vote would go ahead. If the vote succeeds, the measure would go to the Shura Council. There is no expected effect as King Hamad has authority to overrule both parliament and the Shura Council.
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