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Gulf Air’s Third Quarter Results Indicate Airline On-track Towards Achieving 2013 Restructuring Target

November 26, 2013 Financial No Comments Email Email

Gulf Air’s 2013 third quarter financial and operational results demonstrate that Bahrain’s national carrier is on-track towards achieving its annual restructuring targets.

DPM  KBenefiting from a strong summer, optimised capacity management and cost efficiencies from the restructuring, Gulf Air’s operating results were 24% better than predicted for July, August and September. This contributed to an overall year-on-year reduction in the airline’s losses of over 50%, keeping it firmly on-target to cut its annual losses.

Led by Gulf Air’s Board of Directors, chaired by H.E Shaikh Khalid bin Abdulla Al Khalifa, the Deputy Prime Minister, and managed by the airline’s Executive Restructuring Committee headed by H.E. Mr. Kamal bin Ahmed Mohammed, Minister of Transport and driven by the airline’s management team, Gulf Air is now nine months into its restructuring plan that, in addition to reducing the national carrier’s annual losses, is aimed at strengthening its core network, improving products and services and creating a commercially sustainable airline that effectively serves the needs of the people and economy of Bahrain.

“Gulf Air’s restructuring continues to gain momentum,” the airline’s Chairman H.E. Shaikh Khalid bin Abdulla Al Khalifa said, commenting on the third quarter results following a meeting of the airline’s Board of Directors. “The results speak for themselves, the airline is now in a much stronger position than it was a year ago and remains on-track towards achieving the financial and operational goals of the restructuring strategy. As Gulf Air continues to deliver solid results, the national carrier is being positioned for its emergence from the restructuring process and, ultimately, for its long-term success.”

Since embarking on the ambitious plan in December 2012, Gulf Air has successfully completed the realignment of its network and is now focused on strengthening the airline’s core routes. In the third quarter Gulf Air announced an increase in its flights to Dubai and Kuwait, as well as four cities in Pakistan. In parallel, following the successful conclusion of negotiations to return surplus aircraft, the airline completed the restructuring of its fleet.

Year-on-year the airline reduced its expenses by close to 30% with savings being realised predominantly through operational and maintenance costs as well as a reduction in manpower, in-line with the requirements of the revised fleet and network. Year-to-date, Gulf Air has realised a total workforce reduction of 27%. Despite this, the airline continues to lead the way amongst its regional competitors in terms of nationalisation.

Gulf Air ran an efficient operation during the busy summer travel season, achieving an on-time punctuality rate of above 90% per cent, its best ever third quarter performance. Gulf Air’s operational on-time performance results for the quarter independently position the carrier as a global leader in on-time-punctuality.

Investments in product and services continued. Boosting its in-flight-entertainment system, Gulf Air became the first airline in the Middle East to launch BBC Knowledge, a branded channel featuring award-winning factual and non-fiction content, through its in-flight-entertainment system. The airline also completed the rollout of a suite of new religious channels in time for the busy Haj season.

H.E. Mr. Kamal bin Ahmed Mohammed, Chairman of Gulf Air’s Executive Restructuring Committee commented, “Gulf Air has successfully delivered against its restructuring goals for a third successive quarter and I would like to thank the airline’s employees whose hard work made this possible. Our national carrier’s financial trajectory has improved dramatically and the positive impact of the airline’s operational results can be seen by its customers. A strong foundation for the future has been set. Looking forward, continued product improvement and network strengthening combined with cost efficiencies realised from the restructuring, will ensure that Gulf Air continues to further build on the progress already made.”

Despite the challenging business environment in which Gulf Air operates, Bahrain’s national carrier remains committed to the continued implementation of the restructuring plan to ensure the realisation of its goals – enhancing its position as a key national infrastructure asset supporting the Kingdom’s ongoing economic growth and better serving Bahrain and its customers. Gulf Air is optimistic that the twelve month restructuring targets will be achieved.

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