M a r c h 2 0 1 3 | Qatar Today
Gulf Air
Flight plans While its two neighbouring national carriers are reaping gold, Bahrain’s airlines are struggling. Bahrain Air – the privately-owned low-cost carrier – has shut down citing political unrest in the island kingdom to be the reason.
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Air, the 63-year-old former flag carrier of Bahrain, Qatar, the United Arab Emirates (UAE) and Oman, has declined steadily since three of its member states broke away to establish independent carriers. Gulf Air has faced challenges in recent times, in common with other global carriers, but it says that “combinations of unprecedented regional and economic factors have made business increasingly difficult. “Given this, Gulf Air, its shareholder Mumtalakat and the government, both through the cabinet and parliament, are all working towards a common goal - to secure Gulf Air’s long-term sustainability and to actively address the airline’s loss-making position.” Just before we went to print, Gulf Air sent another statement regarding the belttightening measures adopted which stated: “Despite a difficult operating environment, restructuring measures have started yielding results and the strategy remains on track to achieve overall cost savings of 24% by the end of 2013. In January 2013, through the implementation of prudent cost saving measures and an aggressive efficiency drive, the airline reduced its overall losses by over 34% compared with January 2012, posted a 9.6% increase in passenger revenue against its budgeted revenue and, increased its yields by over 8%.” The airline also cut its expenditure significantly through reductions in aircraft lease fees, flight-related charges and staff expenses and the closure of four loss-making routes. Based on current progress and the estimated forecasts, the restructuring plan is on track to achieve its cost-savings target by the end of 2013. Indications are also strong that the revenue per available seat kilometre (RSK) will achieve the targeted 9% in-
Maher Salman AlMusallam Acting CEO, Gulf Air
crease in 2013 through the establishment of robust performance frameworks designed to deliver greater efficiencies. When asked about the strategic steps taken by Gulf Air to ensure it is competing with the larger airlines in the region, Maher Salman AlMusallam, Acting CEO, Gulf Air says, “Gulf Air’s business model is different from that of the larger regional carriers. As part of the current Gulf Air restructuring process, the airline is optimising its fleet and network by strengthening its core services in the MENA markets and concentrating on high-demand and high-yield point-to-point routes to connect Bahraini businesses with regional markets.” As such, the airline operates one of the largest networks in the Middle East and operates flights to regional capitals including Amman, Baghdad, Beirut, Cairo, Khartoum and Sana’a. It also operates multiple daily flights to its entire GCC network including Kuwait, Doha, Abu Dhabi, Dubai, Muscat, Jeddah, Riyadh, Medina and Dammam. “The airline is focused on four key areas – fleet, network, product and cost – to offer
passengers more value for money, a network reflecting customer demand as well as new and improved products. In addition, the airline is continuing to strengthen its Middle East network, retaining Gulf Air’s position as the largest regional network carrier while connecting key global markets with Bahrain,” he says. Gulf Air’s restructuring strategy is aimed at taking the airline on a path towards sustainability. The main challenge for the airlines in the next five years, according to Maher Salman AlMusallam, is fuel prices, which continue to be a major challenge for the entire aviation industry. “Gulf Air, like other airlines, is impacted by the global economy in addition to the growing competition both regionally and globally,” he says. “The optimised fleet and network will see Gulf Air operating a mix of wide, and narrow body aircraft with one of the youngest fleets in the region (a little more than four years) offering best-in-class products and services,” he says.
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