Bahrain discusses huge injection for Gulf Air

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Bahrain's parliament is discussing a huge bail-out for troubled national carrier Gulf Air, amounting to some BD664 ($1.7 billion).

The kingdom's finance and economic council met with the finance ministry and ministry of transport earlier this week to "study the situation" at the loss-making airline, says a statement from the lower house of parliament.

It adds that the discussion centred on appropriation from the 2012 state budget to support Gulf Air, with the figure required put at BD664 million.

The discussion underlined the importance of retaining the national carrier, lack of which would "negatively affect" the country given the number of companies which depend on Gulf Air.

But the statement does not detail how the parliament expects the airline to respond in terms of increasing its efficiency and stemming losses.

Gulf Air has been attempting for several years to adopt a sustainable business model, and had been part-way through a new restructuring effort - including a fleet renewal - when unrest in the kingdom and the increase in fuel prices stalled its recovery.