Gulf Air has embarked on a major business restructuring plan, designed to reduce the airline’s losses.
Unveiling the strategy yesterday, the airline said three-year plan would focus on “optimising its fleet and network, streamlining its organisational structure and re-engineering its internal processes”, in order to create a “more dynamic and efficient” business.
Bahrain’s Deputy Prime Minister, Sheikh Khalid bin Abdulla Al Khalifa, commented; “Gulf Air is a key national infrastructure asset and provides business links which are important for wider economic development. In order to best position the airline for future growth and ensure it remains integral to the kingdom’s evolving business requirements, the airline’s management, with the support of the board of directors, are committed to implementing a restructuring strategy to put Gulf Air on a path towards sustainability.
“The restructuring and subsequent financial rehabilitation of Gulf Air will liberate treasury resources for domestic investment and result in a transformed national carrier,” he added.
The restructuring will be based on several key areas, including the strengthening of Gulf Air’s its Middle East and North Africa operations and closing “commercially unviable routes”. The airline said it intended to continue offering links with “selected European, Far East and Indian sub-continent markets”, but that it wanted to move away from “low-yield transit traffic” and to concentrate on “high-demand and high-yield point-to-point routes”. Earlier this year, Gulf Air axed several inter-continental routes, including Athens, Milan and Kuala Lumpur.
In terms of aircraft utilisation, Gulf Air said it would “simplify” its fleet, to match its revised network and flight schedule, operating a mix of wide- and narrow-body aircraft. The airline also said it would “rationalise” its workforce.
In total, Gulf Air plan aims to achieve cost savings of 24% and increase revenue per available seat kilometre by 9% by the end of 2013.