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Gulf Air unveils three year strategy to build a sustainable national airline

26-Nov-2009 8:39 AM

Gulf Air released (25-Nov-2009) its business is to become commercially viable from 2010 with a phased three year realignment. Following an initial three month structural review, the carrier announces its strategy to turn the company into a commercially sustainable business in 2012. Gulf Air’s new strategy will focus on three core areas:

  • A targeted, more focused international network;
    • Expand operations to over 20 new destinations in the Middle East, Africa, Asia and Europe;
    • Suspend up to 15 routes and close a number of unprofitable overseas stations, including current operations to Bangalore, Hyderabad and Shanghai;
  • A superior, more consistent product:
    • Introduce a number of new product innovations, seating arrangements, IFEt and other on-board amenities, tailored to the Middle East region;
    • Reduce fleet costs and minimise expenditure that no longer adds customer value;
  • A modern, more efficient fleet;
    • Fleet composition: Focus primarily on narrow-body aircraft and regional jets, including a number of long-range narrow-body aircraft, which will connect Bahrain to financial centres in Europe and Asia;
    • This involves a substantial increase in current requirements for narrow-body aircraft beyond the fifteen ordered A320s, three of which have already been delivered; and reducing the requirement for wide-body aircraft;
    • Engaging its aircraft manufacturing partners to align its current order book with the new strategy;
    • Considering the introduction of regional jet aircraft on the short-haul routes from Bahrain from 2010;
    • Considering plans to sell five A340 aircraft;
  • Phase I: Next six to 12 months;
    • Focus on re-aligning the existing network;
  • Phase II: The 2nd and 3rd years;
    • Focus on growing new markets;
  • Estimates the programme will save the Government of Bahrain up to USD2.65 billion over next five years, according the Gulf Air Chairman and Bahrain Mumtalakat Holding Company CEO, Talal Al Zain. [more]

Gulf Air: "If our customers are our number one priority then our employees are our most important asset. 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 expats who continue to work hard for Gulf Air’s long term success and future," Samer Majali, CEO. Source: Gulf Air, 25-Nov-2009.