Gulf Air Seeks Airline Alliance

Air Transport
Aviation Week & Space Technology Mar 22 , 2010 , p. 46
Neelam Mathews
Manama, Bahrain

Gulf Air wants to upgrade its ‘regional player’ image
Printed headline: Alliance Shopping

Gulf Air is searching for a global alliance membership to expand its presence, build its revenues and cut operating costs as it battles a 2009 loss of $1.3-billion.

CEO Samar Majali says its Middle East network will be an asset to any of the major airline alliances. “We feel our network will be a strong factor strategically,” he says. “We are working to extend it without incurring costs.”

That effort includes making Bahrain the base for twice-daily flights to every regional capital in the Middle East by 2012. With such a network, Gulf Air would enhance any alliance’s global marketing efforts. But an alliance membership would open opportunities for Gulf Air, also.

“We would like to tap the alliance for the U.S., China and South American markets,” Majali says, noting he hopes to begin talks this year.

While bullish on expansion in the Middle East, Majali is now a bit bearish on flights into India and China, scaling back earlier plans for a buildup there. Instead, the carrier will concentrate on restructuring its fleet of 34 aircraft, including Airbus A340s, A319s, A320s and A330-200s, and Embraer 170s.

The Embraers will be used on regional flights to Larnaca, Cyprus; Istanbul; Athens; Erbil, Iraq; Baghdad; and Muscat, Oman. Two more Embraer 170s are expected this year.

But the airline also is debating a shift to the Airbus A318 or Mitsubishi Regional Jet to tackle lower-demand regional routes. If either is selected, the Embraer 170s will be dropped.

“We would like to touch secondary points with populations of around one million,” Majali says.

He wants to add 20 new destinations this year, but expects to cut as many as 15 under-performing routes.

Majali, who came to Gulf Air last August, is credited with a 1999 turnaround at Royal Jordanian, where he was CEO. One reward was Royal Jordanian’s acceptance into the Oneworld alliance.

There is speculation that Gulf Air is in talks with Oneworld. The Star Alliance is another possibility, although it is represented in the region by EgyptAir, which has a far greater international presence than Gulf Air.

Neither alliance is commenting on its plans for the region.