in Air Transport

Majali quits Gulf Air

Posted 29 November 2012 · Add Comment

Samer Majali, who was tasked with restructuring the Bahraini airline Gulf Air to save it from financial collapse has resigned as chief executive..

The board of directors of the airline - part of the Bahrain government's sovereign wealth fund, Mumtalakat- issued a statement saying "it has accepted the resignation of the Chief Executive Officer, Mr. Samer Majali, submitted earlier this year following the appointment of the Gulf Air Board of Directors in mid-November. Mr. Majali will remain in his position until the end of 2012."

Majali joined Gulf Air in 2009 from Royal Jordanian where he had led a remarkable turnaround and brough RJ into a global alliance. His goal at Gulf Air was to introduce a restructuring plan to build a national airline that would "effectively serve the people and the economy of Bahrain and ultimately ensure its long term future and success." 

However, there have been a number of suggestions that Majali's pragmatism did not match the ambitions of some in the Bahrain government. During last year's Bahrain Air Show there were some pubic indications that all was not right when a last minute much hyped launch order for Bombardier C-Series was pulled. 

Industry insiders have credited Majali with making significant progress towards commercial sustainability, by cutting costs, increasing revenue and reducing operating losses by over BHD 50 million despite the difficult operating environment characterised by high-fuel costs and increased competition. 

But there were strong feelings against cutting manpower and routes. 

Earlier this month  Gulf Air cancelled its order for 20 Airbus A330s and instead is taking eight of the classic A320s ahead of a further 16 Airbus A320neos. 

The Bahrain Government agreed a further cash injection and appointed a new board of directors to oversee the spending of the investment - there are suggestions that a strategy preferred by the new board was not one that the CEO believed could result in the financial success the country needed. 

Majali's resignation was met with some shock and there were messages of support across Twitter and social media sites. Majali was the first Arab chairman of IATA and is greatly respected and liked across the industry. 

There has been no news of a successor at this stage. 

Industry analyst Saj Ahmad said: "

Majali's departure has been on the cards for a while and it's fair to imply that he has done what he could with what leverage he could. With the restructuring of Gulf Air now under way, it makes sense for him to leave that to a new CEO while he can focus on other interests.

A new CEO would have been required anyway given the changes the airline is starting to undergo, akin to a fresh managerial start alongside changes to the carrier itself.

Gulf Air has been painfully slow to adapt and respond to the expansive GCC air travel growth that is now harboured between the UAE and Qatar, and the recent Bahraini uprising has not exactly helped the ruling family's desire to tap into that demand pool while unrest is still prevalent.

Majali has arguably done a great job in keeping Gulf Air as one entity, rather than seeing it broken up or merge with Bahrain Air, but his successor will have to equally demonstrate that the carrier can indeed go it alone.

In a statement the airline said: " Mr. Majali thanked His Majesty King Hamad bin Isa Al Khalifa for his leadership, His Royal Highness the Prime Minister Khalifa bin Salman Al Khalifa for his support, and His Royal Highness the Crown Prince Salman bin Hamad Al Khalifa for his trust, confidence and guidance and finally the Members of the Gulf Air Board of Directors for their counsel. He also thanked the employees and management of Gulf Air for their support and their hard work towards achieving significant progress during the last three years in a challenging operating environment. 

"Finally he stressed the importance of Gulf Air to the Kingdom and economy of Bahrain and wished the airline every success in the implementation of the new strategy.'

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