Bahrain’s national carrier Gulf Air slashed its losses by a third last year compared to the previous year, it has been revealed.

The government-owned carrier lost BD63 million ($166 million) last year, compared to BD89.5 million in 2013, Transportation and Telecommunications Minister Kamal Ahmed told a press conference at Gudaibiya Palace after the weekly Cabinet session, reported the Gulf Daily News (GDN), our sister publication.

He described the performance as 'miraculous' and attributed it to a major cost-cutting exercise launched at the beginning of 2013, after the carrier racked up losses of BD211 million in 2011 and around BD200 million in 2012.

“Since we started implementing a new strategy to restructure Gulf Air in early 2013, losses reduced by the end of that year by 52 per cent and we managed to maintain our services, quality and safety obligations in line with international requirements and this was reflected last year,” said Ahmed.

“Looking for positive administrative and financial outcomes we had to increase revenue and, for that, negotiated with most of our providers on new contracts, while modifying existing ones, and we have managed to leverage our revenue.

“Bahrainisation rate stands at 65 per cent and since the airline started operating more than 60 years ago this was never been achieved - and we have plans to Bahrainise up to 70 per cent of pilots by the end of this year.

“They doubted if we could do it with staff reduction from around 4,000 to 2,870, but we managed to do so while getting better and better.”

The major streamlining of the airline has also involved a reduction in the fleet and number of destinations.

However, Mr Ahmed said a new destination could be added to the existing 45 routes this year - which are covered by just 28 aircraft.

He also said the number of passengers was increased last year by 3.2 per cent from 2013, but did not disclose figures.

“This came as we refurnished and re-equipped aircraft over 18 months by our internal maintenance department, which is mostly Bahrainis,” said Ahmed.

“We had 40 aircraft serving 39 destinations in 2012, but with just 28 served 43 destinations last year - and with two more destinations Al Qaseem and Al Ta'eef in Saudi Arabia later added we are studying one more destination this year to make it 46.

“We had 93 per cent on-time flights last year according to flight status data reports.”

However, Ahmed ruled out the possibility of making a profit this year.

“We will reduce losses, which are now just BD63 million, as we did a miraculous comeback last year with 33 per cent reductions,” he said.

“Profitability is still our destination, but not by the end of this year.

“Over 20 years we only recorded profitability in two of them, once in the mid-1990s and in 2004.”

However, the minister said Gulf Air contributed around eight per cent of GDP and said more details would be revealed once the financial data is audited. - TradeArabia News Service