Gulf Air restructuring on track, losses down 50pc
Manama, July 28, 2013
Gulf Air, the national carrier of Bahrain, has reduced its losses by more than 50 per cent as a result of a major restructuring strategy during the first six months of the year, a report said.
Officials said the figures show a three-year strategy to safeguard the airline's future has started to pay off, reported the Gulf Daily News, our sister publication.
They were primarily achieved through a 26 per cent cut in year-on-year costs across the organisation, bolstered by a yield increase of 6 per cent between April and June.
Gulf Air is also 15 per cent ahead of its financial target in the first six months of the year, while its Bahrainisation rate has now reached 63 per cent - the highest in its history.
The airline is reportedly seeking to shed up to 1,066 of 3,800 jobs as part of a massive downsizing operation - of which 565 are based abroad.
It hopes this will reduce its losses from BD95 million ($248 million) to BD58 million by 2017.
Transport Minister Kamal Ahmed, who is also chairman of the airline's executive restructuring committee, welcomed the figures.
"Gulf Air's results, achieved in an operating environment characterised by volatility and severe competition, reflect a significant achievement for the airline and demonstrate the effectiveness of the restructuring strategy," he said.
"This progress would not have been possible without the commitment and contribution of all Gulf Air's staff and management and I would like to thank them for their support.
"Much has been done, yet there is still much more to do. While the operating environment remains challenging, we are committed to the continued implementation of this restructuring plan.
"Our main priority over the next six months is to further reduce operational costs and increase sales efficiency. In parallel, we will continue to meet customer needs as well as improving the product to deliver more value on a consistent basis, thereby strengthening trust and reinforcing the airline's position as the carrier of choice."
Gulf Air has already cut its fleet from 36 to 26 and its workforce by 25 per cent, but no Bahraini pilots have been affected.
It expects to further reduce losses as it lowers its operational costs, renegotiates contracts with vendors and suppliers and fine-tunes its network.
Deputy Prime Minister and Gulf Air board of directors chairman Shaikh Khalid bin Abdulla Al Khalifa said the figures were cause for optimism.
"Gulf Air's restructuring is firmly on track, strengthening the airline's position as a key national infrastructure asset and supporting the kingdom's evolving business needs while freeing additional treasury resources for domestic investment," he said.
"The ongoing restructuring has been implemented across the organisation and modified every facet of the national carrier's operations with a view to putting Gulf Air on a path towards sustainability and aligning it to the kingdom's evolving business requirements."
In the first six months of the year, Gulf Air cemented its position as one of the world's most punctual airlines with 90 per cent of its flights arriving on time, according to statistics published by FlightStats Data, an independent provider of flight information services.
It now claims to have one of the youngest fleets in the region and is maintaining strategic links to select points in Europe and Asia as well as strengthening its network in the Mena region. – TradeArabia News Service