Bahrain Air has halted all flights and will liquidate its assets, according to USA Today.
The privately owned airline that launched in 2008 offered 105-110 regional flights to 18 destinations in the Middle East and Asia.
Since establishing themselves as a low-cost option and then changing into a full-service airline, in 2010, they hit a financial wall, leaving them no choice, but to declare bankruptcy.
They also employed about 300 people, according to USA Today, who will now have to find other jobs to support themselves and their families.
"Bahrain Air's breakdown contrasts with the fortunes of Emirates, Etihad Airways and Qatar Airways, the state-owned Middle East companies that have expanded into global airlines to challenge established network carriers," Bloomberg News writes.
The Middle East publication Gulf Business asked: "(In) a region where global airlines are growing faster than many international competitors, why has Bahrain's local carrier failed to make ends meet?"
Bloomberg gave the answer by noting how "private airlines in the Gulf region face financial difficulties as they compete with state-owned carriers."
This is true and unfortunate for privately held companies, as state-run businesses, not just airlines, but in general, are funded entirely by the state, thus, financial issues will never come up, unless, the government itself, wants to shut down operations.
"The Bahraini government is looking to re-energise [sic] Gulf Air at the expense of facilitating growth for Bahrain Air, so the smaller carrier was always going to struggle, irrespective of the other bigger (Gulf) carriers," Saj Ahmed, chief analyst at Strategic Aero Research, says to Gulf Business.
Bahrain took over full ownership of Gulf Air in 2007 after joint-owner, Oman withdrew from the loss-making carrier, according to Reuters.
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