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Bahrain bridging the Gulf

Posted 22 January 2018 · Add Comment

The Bahrain International Air Show is still a year away but more than 75% of exhibition space has already been sold. Bahrainís Transportation and Telecommunications Minister, Kamal bin Ahmed Mohammed, talks to Alan Dron about the 2018 show, Gulf Air and island kingdomís new airport.

In aviation terms, Bahrain has seemed something of a backwater in the Gulf in recent years.
Its international airport is relatively small and increasingly elderly; its national airline, once the leading operator in the region, has been dwarfed by the fast-growing ‘big three’ of Emirates Airline, Etihad Airways and Qatar Airways; and it seems to have missed out on the tourist boom in Dubai, Abu Dhabi, Oman and even Qatar.
Those factors are now being addressed, with the aviation sector receiving increasing attention from the Bahraini Government. And, as in other Gulf states, aviation is playing a wider role in stimulating the economy.
One of the most obvious examples of this is the island state’s international airport at Muharraq, which is in the process of gaining not only a new terminal building but also improved ancillary features, such as an air traffic control centre and maintenance facilities.
The new airport should be ready by 2019, said Transportation and Telecommunications Minister, Kamal bin Ahmed Mohammed, during a visit to London to promote the 2018 Bahrain International Air Show.
Until now, the show has taken place just three months after the much larger Dubai Air Show, a factor that dissuaded some companies with limited budgets from attending. From 2018, it will move to November, exactly midway between Dubai events.
Mohammed oversees the entire Gulf Air group – Gulf Air itself, Bahrain Airport Company, BAS ground handling plus a new company, Bahrain Duty-Free, of which Bahrain will own 45% for the new airport.
Construction of the new airport itself “is progressing very well”, he said. “We’ve reached Level 2 and started installing the roof.”
The new facility is on track for opening in the third quarter of 2019.
The existing terminal was built in 1972 and has an annual passenger capacity of 3.5 million. In 2016, it handled 9 million travellers – an indication of how badly the new building is required.
The new terminal will have an annual capacity of 14 million passengers and is being built with a careful eye on costs: “I think with the budget this is the most optimum project in our part of the world. There are airports built with double the capacity, but with budgets eight to 10 times our budget of $1.1 billion.”
The fate of the existing building is still being decided, with options being weighed on whether to maintain or demolish it, said Mohammed. The age and condition of its mechanical and electrical systems might make it more expensive to retain than demolish, but no decision has yet been taken.
As with airlines, ancillary revenues at an airport can bring in significant amounts of money and the provision of new maintenance facilities will allow work to be done in Bahrain that, at present, has to be sent abroad.
The main user of the airport is, of course, Gulf Air, which is about to undergo a major re-fleeting exercise.
At the 2016 Bahrain Air Show, it announced major new orders and adjustments to previous commitments. The new line-up included 16 Boeing 787-9s (replacing the previous order for ‘12 to 16’ of the smaller -8 version), as well as 17 Airbus A321neos and 12 A320neos; 10 of the A320s had previously been announced.
The company has a current all-Airbus fleet of six A330-200s, six A321s and 16 A320s.
Gulf Air has been through a major restructuring since early 2013, a process that saw its fleet reduced from 40 to 28 as it battled to cut huge deficits. The new Airbus order will replace the carrier’s narrow-body fleet and expand numbers again over the next few years.
At the time of writing, a replacement for Gulf Air’s retiring CEO, Maher Al Musallam, was still awaited and would be appointed “as soon as possible” through an open recruitment process, said Mohammed
“We’re also looking at appointing a new CEO for the Group,” he revealed. “The idea is to expand the portfolio and increase the impact of aviation on the economy of Bahrain.”
Al Musallam has been successful in greatly reducing Gulf Air’s previously heavy annual losses, but Mohammed cautioned that figures for 2016 were unlikely to be as positive as those of the previous year.
“In 2016 it was a tough year, not as good as 2015. The company needs to optimise its network and rationalise its operation.
“We’re competing with the biggest airlines in the world. They can afford to invest and expand their network. We need to make sure Gulf Air is serving the Bahraini economy. We will continue making sure that Gulf Air has the largest connection of destinations within our region and expanding connectivity to east and west. We need to expand in Europe a little bit. We think the airline is an important infrastructure to connect Bahrain with the world. Without it we can’t connect to other business activities.
“Gulf Air will receive a new fleet next year; 10 787s have been ordered, a figure that can be increased to 16. It’s also receiving the Airbus A320neo from next year. So I think improving the quality of the services and our product, together with optimisation, will enable the new business to improve.
“The new board needs time to finalise their plan. All options are open.”
Asked how the dispute between several Arab nations and Qatar was affecting Gulf Air, he said: “I think it’s affecting Qatar Airways more than us. They have lost all their destinations in the Gulf. It’s sad to see this and we hope it won’t last long.”
Meanwhile, the Gulf Aviation Academy, which trains commercial pilots, “is performing very well and making money. Gulf Air is only 24% of our customers. It serves other airlines. We’re now commissioning a new Airbus A320 simulator and procuring a new simulator for the Boeing 787-9.”
The island’s major aviation attractions now include the Bahrain International Air Show, whose 2018 iteration aims to achieve a balance of growing in size, while keeping the sense of intimacy that has characterised the previous events.
There will be more exhibition space and the hangar that was only half-used in 2016 will be fully utilised this time.
“We need to be sure we don’t make it too big,” warned Mohammed. “We don’t want to increase the number of chalets, although we can. We’ve never had a problem in selling the chalets; that’s the easiest aspect. And you think, ‘Why not build more and make more money?’ But we want to keep the uniqueness. It’s a cosy airshow.”
One major nation that will have a more notable presence in 2018 than in previous years is Russia, whose United Aircraft Corporation (UAC) signed an agreement in July that will see several UAC subsidiaries including Sukhoi, Ilyushin, Tupolev and Irkut appearing at Sakhir Air Base, the site of the show.
State technology and weapons export agencies, Rostec and Rosoboronexport, will also be present. “There will definitely be bigger Russian participation,” said Mohammed. “We’ve signed for two chalets with UAC and Rostec and Rosoboronexport, who will bring all the companies with them. We’re expecting the Russian Knights [aerobatic] team to appear.”
Turkey, which had a major presence at the 2016 show, will also be present again, as will Indian company, Hindustan Aeronautics, and the country’s defence research and development organisation. Thales, CFM International, SITA and Leonardo are among other major names, which will be presenting their wares.
“All the big names have signed up but we’re now looking at SMEs who want to expose themselves,” said Mohammed. Traditionally, Arabs like to meet people face-to-face, to size them up and get a feel for their qualities; personal contact is important. “If you don’t come to the region, you won’t be known,” noted the minister.
 

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