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AN ambitious strategy that aims to steer the national carrier through troubled times has been launched by Gulf Air chief executive officer Samer Majali, writes ANASUYA_ KESAVAN.
New plans which include substantial job losses aim to cut costs, boost revenues and close the gaping hole that the airline makes in the national economy through government subsidies, which is reported to be running at $200 million a month.
If the business was to continue on its current course the cost to Bahrain's economy could be as much as BD1 billion over the next five years, the company revealed at a press conference at the Mšvenpick Hotel on Monday.
Mr Majali said that international competition, low cost budget carriers and the recent decline in passenger volumes and fares have largely contributed to the airline's losses. He added: "We are currently expected to record an operating loss of BD193 million this year, equivalent to BD243 per Bahraini national or 28 per cent of the kingdom's deficit.
"The new strategy best reflects the needs and demands of our customers. For the first time, Gulf Air will focus specifically on Bahrain, serving the kingdom with higher frequency, non-stop services to more destinations across three continents."
Using a modern, more efficient fleet that includes a number of long-range narrow-body aircraft, Gulf Air says it aims to target a more focused international network.
Operations will be expanded to more than 20 new destinations in the Middle East, Africa, Asia and Europe but 15 other non-profitable routes including Shanghai, Hyderabad and Bangalore will be suspended.
Mr Majali added: "Phase one will be undertaken over the next six to 12 months and will focus on re-aligning the existing network to match market demand. Phase two will be undertaken in the second and third years and will focus on growing into new markets where there is identified growth potential, supported by the introduction of a compelling new range of products and services.
"This programme will require some tough decisions as we look to address what remains a challenging marketplace. We will be reviewing all cost elements that do not provide equivalent or greater value and within that context we will be looking to significantly re-size our workforce over this three year period.
"This will be done through natural attrition, retirements, the ending of contracts and other associated measures. Some redundancies may be inevitable, in which case we will aim to redeploy individuals elsewhere within the company, but our priority will always be on retaining the best and most productive talent, safeguarding the jobs of Bahraini nationals and expatriates who continue to work hard for Gulf Air's long term succes."
