Wednesday, March 17, 2010

Gulf Air Turnaround Plan Reinforces Regional Dominance


Aviation Daily Mar 17 , 2010 , p. 12
Neelam Mathews

Gulf Air has unveiled a new strategic plan that it says will bring its present losses down from $1.3 billion to $400 million.

The carrier, which began flying as a commuter carrier in Bahrain 60 years ago, plans to focus on its fleet and network by increasing its current frequencies to key destinations through double dailies. It will refocus on simplification of its fleet, and plans to add a twice daily service to every regional capital in the Gulf area.

CEO Samer Majali says the airline’s mandate is to provide value without the need for government support.

As for its fleet, of the 15 A320s ordered, six have been delivered and the rest will arrive by 2011. Five narrowbodies are grounded, and of the five A340s that are at least 15 years old two have been sold and three are on the market.

Gulf Air also expects to lease two more Embraer E-170s this year; it currently leases two of the aircraft type, and is analyzing whether to take up to 10 regional jets, not necessarily from Embraer. Majali told The DAILY that turboprops have “failed miserably,” and the E-170s are a pilot project to see if the airline should invest in more RJs. “Should the decision be made in favor of a competitor RJ, we will phase out the E-170s,” says Majali.

“We want to simplify our fleet based on a few widebodies and increasing regional jets. We would like to touch secondary points with population of around one million, get in there and get the [first-to-market] advantage,” Majali says.

Gulf Air currently flies to six European points after recently adding three. It wants to add 20 more routes from points within a four-hour range. Pakistan, Saudi Arabia, Iran and East Africa are its focus.

Majali, who was brought in last year from Royal Jordanian to turn Gulf Air around, says India’s yields are too low, and it also is moving away from China for now to concentrate on better-performing markets.

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