Bahrain Air

Bahrain to continue to back Gulf Air, but carrier may emerge radically changed

Gulf Air will continue to fight another day. After months of uncertainty over the outlook for the carrier, the Bahrain Government and the National Assembly have agreed to invest additional funds to keep the carrier afloat, according to a report in the state-run Bahraini News Agency. However, even if it does get the funds, Gulf Air may emerge from its latest bailout package a radically changed entity.

At a meeting involving Bahrain’s Deputy Premier, Finance Minister, Transport Minster and the heads and chairmen of parliamentary blocs and committees and members of Financial and Economic Affairs Committees this week, it was decided that Bahrain will continue to provide long-term financial support for the airline. The Shura and Representatives councils – the two chambers of the National Assembly – have informally agreed to a Bahraini Government request to pump additional funds into the airline to allow it to settle some debts and dues.

Gulf Air and Bahrain Air report improving results in a difficult climate

After suffering through local political unrest and the wider repercussions of the Arab Spring in 2011, Bahrain’s two local airlines may finally have something to smile about. Gulf Air and Bahrain Air have both reported improving market conditions and stronger passenger numbers even though some regional instability remains and the two airlines face intense competition in local markets.

Bahrain Air has even reported a couple of profitable months of operations, although neither carrier is in an enviable position. The two airlines are on decidedly better ground than they were 12 months ago, when traffic levels were down by nearly 30% in the early part of 2011. Traffic at Bahrain International Airport has bounced back significantly in the past few months, although passenger numbers have only just recovered to levels seen in 2010.

Gulf Air reported 1H2012 revenue rose 6% year-on-year, although the airline did not report any net figures as it recovers from the Arab Spring related downturn in 2011.

Saudi Arabia reports strongest passenger growth in a decade as market prepares to expand

After several years of sagging performance, Saudi Arabia’s aviation market reported its strongest growth in passenger traffic in more than a decade in 2011, even against the background of the Middle East’s regional social unrest. Despite the Arab Spring uprisings in North Africa and some of the Gulf states, Saudi Arabian passenger traffic boomed in 2011, up 13.6% year-on-year in 2011, to just over 54 million passengers, as the national economy expanded 6.8% (real GDP estimate) on expanding oil output and renewed government and private sector investment. Large infrastructure investments are fuelling high movements of migrants workers from around the Gulf as well as India, Southeast Asia and China.

Gulf Air and Bahrain Air to battle in Saudi Arabia’s Dammam

Saudi Arabia’s Dammam King Fahad International Airport (KFIA), on the other side of the King Fahd Causeway connecting Saudi Arabia to Bahrain, is set to become a home away from home for Gulf Air and Bahrain Air. By the middle of Jun-2012, the two competing Bahraini carriers will be operating 37 weekly flights to/from the airport, located less than 100km from Bahrain International Airport, the home for both carriers and the sole commercial airport in Bahrain.

Dammam is Saudi Arabia’s third largest airport by passenger traffic, after Riyadh and Jeddah. It is also one of just four designated international airports in the country.

Bahrain Air’s hybrid LCC/full service model to gain more premium features amid route expansion

Bahrain Air this year will move its hybrid business model closer to the premium end of the spectrum with the addition of proper business class seats and other service enhancements as the carrier seeks to better tap the Gulf’s premium market while maintaining a low-cost base to competitively fill the back of its aircraft.

This adjustment, along with six new routes to be added this year, will help the carrier put an incredibly difficult 2011 behind it. CEO Richard Nuttall says the renewed expansion will continue the growth launched in 2H2011.

Bahrain Air has a long list of routes it has indicated it is interested in operating, particularly to Tirvandrum, Delhi, Pune, Goa, Amritsa and Chennai in India and Lahore, Multan and Peshawar in Pakistan. South Asia-Middle East links have become common due to large South Asian workforce in the Gulf. Bahrain Air also has interest in Northeast Africa as well as Iran and Turkey. No formal announcements to specific routes have been made yet.