The move leaves Bahrain and Oman as the sole shareholders in the airline. Abu Dhabi government officials have yet to confirm a timeframe for the withdrawal, although it is expected to take place within the next six months.
In a joint statement, Manama and Muscat confirmed Abu Dhabi’s decision, although insisted that they would continue to operate the airline as normal.
Abu Dhabi’s ambitious plans to turn itself into a business and tourism hub have resulted in it concentrating on Etihad. The airline is planning to have 70-80 planes carrying about 8 million passengers within five years. Abu Dhabi International Airport is also undergoing a $6,800 million expansion, which will see capacity increase to 20 million passengers by 2010 from current levels of about 5 million.
Abu Dhabi was seen as the pivotal shareholder in Gulf Air, given its financial resources. In the past it has supported an extensive restructuring and recapitalisation of the airline. It is not clear what direction Gulf Air will now take, although an advisory team has been appointed to study the airline’s privatisation.
In April, the carrier announced that it had recorded profits for the first time since 1997, following a three-year turnaround plan. The three remaining partners injected $238 million into the airline in 2002 after its debts had risen to about $500 million.