Gulf Air said on Tuesday that it is in talks with the sultanate for the sum which has been due after Oman pulled out of the carrier in 2007.

"There is a residual amount of 117 million dinars that remains outstanding from the Sultanate of Oman from the time it withdrew as a shareholder of the airline," the airline said in an emailed statement on Tuesday.

"This continues to be a matter of discussion amongst concerned parties."

There was no immediate public comment by Oman on the matter.

Gulf Air has struggled to find a niche after previous owners Oman, Qatar and Abu Dhabi gave up their stakes partly to establish their own carriers.

The airline was hit by falling passenger numbers in 2011 as anti-government protesters continue to clash regularly with riot police in the island kingdom.

Last week the carrier cancelled its service to Damascus, Athens, Milan and Kuala Lumpur. This follows ending services to Entebbe and Geneva earlier in the month.

A government delegation briefed parliament in January and called for a restructuring of the company for "effective operational requirements", state media reported.

The airline said in May it had laid off 200 employees and that bookings were down by a quarter following the Arab Spring uprisings in the region.

(Reporting by Praveen Menon; Editing by Firouz Sedarat)

• A Permanent Economic Emergency