Gulf Air future strategy under review in Bahrain

A major participant and sponsor of Bahrain International Airshow 2012, Gulf Air showcased a number of promising developments at the recent event, with a primary focus on its upcoming business class seat, which will be introduced this month on long-haul narrow and wide body aircraft. However, while a display model of the in-flight innovation was the centre of attraction at Gulf Air’s chalet, promotional efforts were marred by growing speculation about the airline’s future, especially when a much-expected order of Bombardier CSeries aircraft failed to materialise.

Inundated with media enquiries about the situation, and fresh rumours that Gulf Air would instead lease four regional jets from GE Capital Aviation Services (GECAS), a spokesperson confirmed that operations were under review by the Bahrain cabinet to secure the carrier’s long-term future while stemming its financial losses.

“Common with other carriers around the world, Gulf Air’s business has faced challenges in recent times. A combination of unprecedented regional and economic factors has made business increasingly difficult, in particular the regional political situation, the high price of fuel, low passenger numbers and the suspension of numerous destinations,” explained the spokesperson. “In light of this and further to a statement by the cabinet, we can confirm that the senior management team, with the support of the government and its shareholder, Mumtalakat, is initiating measures aimed at securing Gulf Air’s long-term sustainability, as well as actively addressing the airline’s loss-making position.”

Official documents, which were leaked to Gulf Daily News, suggested that a number of options were being explored, such as continuing as normal with government support, downsizing operations, selling Gulf Air to a third party, or dissolving the business altogether as a final resort. Unsurprisingly, the topic was off-limit with CEO Samer Majali at Bahrain Airshow, although he brushed off speculation that Gulf Air could be sold or closed down.

“The country needs an airline....they will retain the airline but at an affordable level,” he maintained. Majali’s focus at the event, understandably, was recent achievements for Gulf Air and the overall importance of the biennial airshow to the airline, country and aviation industry.

“Given the continued growth of Bahrain as a trading, business and aviation hub, this airshow is long overdue. It should have been launched several years ago,” he told Aviation Business. “As the national carrier, we are very proud that the second edition of Bahrain International Airshow has been such a success. For us personally, it is a very important event on a strategic level and we ensured our top management was available for meetings and networking across the three days.”