Business
Gulf Air announces restructuring plans
Bahraini career spells out its strategy to turn the company into a commercially sustainable business
- By Habib Toumi, Bahrain Bureau Chief
- Published: 21:08 November 23, 2009
- Image Credit: Supplied
- Gulf Air has up to 20 Boeing 787s on order, as well as 15 Airbus A320s and 20 Airbus A330s, a wide-body aircraft.
Manama: Gulf Air, the flag carrier of Bahrain, on Monday announced its strategy to turn the company into a commercially sustainable business by 2012.
"We have a clear mandate: to build an efficient, commercially sustainable and dynamic airline that effectively serves the people and the economy of Bahrain and represents the Kingdom on the world stage," said Talal Al Zain, Gulf Air Chairman and Chief Executive of Mumtalakat, the investment company for Bahrain.
"To achieve this we must re-align Gulf Air to deliver a product that our customers need and want. The airline will become more efficient as we align its cost base with this new strategy, maximising investment into areas of the business that will offer the best returns whilst reducing cost in those that don't. Gulf Air currently relies on significant Government support, spending far more than it earns. This is clearly unsustainable and the funds could be invested into other important areas of the national economy," he said.
According to Samer Majali, Gulf Air's Chief Executive Officer, “the new strategy best reflects customers' needs and demands."
"Gulf Air will focus specifically on Bahrain, serving the Kingdom with higher frequency, non-stop services to more destinations across three continents. We will also provide better services to some of the world's leading financial markets, helping to support Bahrain’s significant financial services sector," he said.
Gulf Air's new strategy will focus on three core areas, Majali said.
"It will expand its operations into over twenty new destinations in the Middle East, Africa, Asia and Europe. It will also suspend up to fifteen other routes and close a number of overseas stations that are not profitable and no longer reflect customer needs. This will include the airline's current operations to Shanghai, Hyderabad and Bangalore."
"A superior, more consistent product: Gulf Air will improve the customer experience by introducing a number of attractive new product innovations, seating arrangements, in-flight entertainment and other on-board amenities, tailored to the Middle East region on a consistent basis. Gulf Air will also aim to reduce fleet costs and minimise expenditure that no longer adds customer value," Majali added.
The fleet composition will focus primarily on narrow-body aircraft and regional jets, including a number of long-range narrow-body aircraft which will connect Bahrain to key financial centers in Europe and Asia.
“We estimate this programme will save the Government of Bahrain up to BD 1 billion ($2.65 billion) in direct support over the next five years," Gulf Air Chairman Al Zain said.
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