Gulf Air begins restructuring process to reduce losses

• Airline to focus on strengthening MENA operations and point-to-point routes
• Restructuring will result in cost savings of 24% by the end of 2013

Following the appointment of a new Board of Directors in November last year, led by Shaikh Khalid bin Abdulla Al Khalifa, Deputy Prime Minister, the Executive Restructuring Committee and the Gulf Air management have been working on a balanced restructuring strategy that will take the airline on a path towards sustainability and support the future economic development of Bahrain.

The strategy, which was announced today, aims at strengthening the national carrier’s core services by optimising its fleet and network, streamlining its organisational structure and re-engineering its internal processes to transform the airline into a more dynamic and efficient national carrier that will continue to serve the Kingdom of Bahrain and its customers.

Towards achieving this goal, certain decisive actions have to be taken in order to maintain the sustainability of the airline. The strategy aggressively addresses minimising losses and reinforcing the airline’s position as a key national infrastructure asset, while ensuring it remains to be the region’s most family and business friendly airline.

Announcing the details of the new strategy Shaikh Khalid bin Abdulla Al Khalifa, Deputy Prime Minister said, “Gulf Air is a key national infrastructure asset and provides business links which are important for wider economic development. In order to best position the airline for future growth and ensure it remains integral to the Kingdom’s evolving business requirements, the airline’s management, with the support of the Board of Directors, are committed to implementing a restructuring strategy to put Gulf Air on a path towards sustainability.”

 “The restructuring and subsequent financial rehabilitation of Gulf Air will liberate treasury resources for domestic investment and result in a transformed national carrier,” he concluded.

Developed following careful review and analysis of key critical issues facing the airline, the Executive Restructuring Committee and the Gulf Air management have created a balanced restructuring strategy.

Gulf Air will strengthen its Middle East and North Africa (MENA) operations to ensure that its core customer base is served more effectively and efficiently while taking appropriate measures to reduce losses. Consequently, the airline has already closed eight commercially unviable routes. Gulf Air’s realigned network, will continue to operate to destinations in the Middle East, Europe, Far East and India  offering flexible and multiple flight options while maintaining strategic links with selected European, Far East and Indian subcontinent markets.

The realignment of the network will allow the airline to use its fleet and resources in the most efficient way in MENA markets by moving away from low-yield transit traffic and concentrating on high-demand and high-yield point-to-point routes to connect Bahraini businesses with regional markets.

The restructuring process will ensure that Gulf Air continues to hold a leadership position in the Middle East by operating the largest regional network. The airline, known for achieving the highest on-time performance in the region, will continue to maintain and improve its operational efficiency and reliability.

Gulf Air will simplify its fleet to meet its revised network and flight schedule, operating a mix of wide and narrow body aircraft with one of the youngest fleets in the region (4.3 years). It will continue to offer its hallmark Arabian hospitality accompanied by its award winning customer service and leading on-time-performance reinforcing its position as the region’s most family and business friendly airline.