Gulf Air finances take a turn for the better

Speaking as the Bahrain Air Show opened, Maher Salman Al Musallam said the figures would be “far better than 2014”, when a loss of $166 million (BHD62.7m) was hailed as the best result for a decade.
In preceding years, the annual deficit had been as high as $560 million (BHD211m).
“They will be good results,” said Al Musallam. “We are very optimistic that these are the right figures that we were looking for when we started the restructuring. We know that if we can bring this airline up to this figure, we’ve done the job.”
The results will be officially announced in the spring.
The airline is widely expected to be making a major announcement on re-fleeting later today, according to sources at the national carrier.
Al Musallam has been on record as saying that Gulf Air could not break even so long as it remained a company that merely sold seats on its aircraft, rather than the wider range of services, such as engineering, ground-handling or consultancy, that other major airlines in the region could offer.
However, in December, it was announced that Gulf Air, Bahrain Airport Company and Gulf Aviation Academy will be brought together in the Falcon Group. This will have a common board of directors and will be jointly audited.
Falcon Group came into effect in the last quarter of 2015 and it remained too early to see the benefits, said Al Musallam.
However, he hoped that bringing together the three organisations would further boost Gulf Air’s prospects.
“The airline should be the driving force” in the new grouping, he said, supported by the other organisations.
He added that Gulf Air’s financial position had improved despite the Gulf being “a very difficult, very combative part of the world”, given the proximity of the ‘big three’ Gulf carriers, Emirates Airline, Etihad Airways and Qatar Airways, with their huge route networks.
“They are like big malls and we are a small shop,” said Al Musallam, admitting that “It’s very difficult to convince people to use Gulf Air rather than the big operators.”
However, by keeping “below the horizon” of the three majors, Gulf Air had been able to focus on serving Gulf Cooperation Council nations with high frequencies, a tactic that was proving attractive with business executives wanting to fly to a meeting in the Gulf and return home the same day.
This approach would continue, said Al Musallam. It planned further expansion into Saudi Arabia, for example, and he was hopeful that a bilateral agreement would be signed – perhaps as soon as this week – that would enhance this.
“I hope we will see a bilateral with the Saudis that will at least give us additional frequency to Riyadh and Jeddah.”