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Gulf Air sees 30pc drop in passengers during unrest

Manama, October 9, 2011

Gulf Air, the national carrier of Bahrain, suffered a 30 per cent drop in passengers during the recent unrest in the kingdom, said its chief executive officer.

Travel advisories issued by foreign embassies suggesting citizens should avoid travelling to the country were largely to blame, said Samer Majali.

He said restrictions on travel across King Fahad Causeway and a government decision to suspend flights to Iran, Iraq and Beirut also contributed to losses.

Majali admitted Gulf Air's plan to become a sustainable entity by the end of next year had suffered a significant setback as a result of the unrest.

The airline aimed to reduce losses from BD190 million in 2009 to BD135m last year, to BD88 million this year and close to zero next year.

However, it has been forced to revise its targets and is now hoping to reduce losses to BD100 million by next year, said Majali.

'The airline put together a three-year strategic plan late 2009, which was approved by the government, to turn the airline within a three-year period into a sustainable entity, ie, break even, recover its revenues, costs and so on,' he said.

'This plan called for refocusing the network, concentrated on a more regionally-focused network, flying long range, but investing in a network in the region.

'In 2010, the company reduced losses from BD190 million to BD135 million, reduced manpower by 1,000 people and introduced new airplanes.

'In 2011, our budget was calling for a loss of BD88 million and then in 2012 close to zero, but unfortunately we ran into a brick wall.'

Majali said the airline was trying its best to recover and had been boosted by the return of flights to Beirut.

'Still the level of traffic is far less than it was the same time last year because of the continuing unease and perception on the outside of what is happening here, even though things are okay,' he said.

'We are trying to minimise losses as much as we can but they will be greater than what we expected this year.'

Majali said it was unfortunate that the routes closed were some of the most profitable. However, to reduce losses the airline opened up alternative destinations in Saudi Arabia, Europe and East Africa.

'We are trying to compensate for our losses, but not all routes are equal in profitability,' he said.

'So we are struggling because of the events, a lot of airlines would have shut down completely during events like what happened in Bahrain, but we didn't stop our airline operations for a moment. We are trying to get back on track and reduce the losses again next year below BD100 million and hope to get to sustainability very soon.'

Majali was guest speaker at the Rotary Club of Adliya's weekly meeting held at the Elite Resort and Spa, Muharraq.

It was led by club president Laith Shukayr and attended by Rotarians and guests. – TradeArabia News Service




Tags: Gulf Air | Bahrain | Passengers | unrest | drop |

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