Gulf Air's restructuring soars to new heights, airline's profits surpass forecasted results
Gulf Air's profits in the third quarter were 24 percent better than its forecast (Courtesy of Khaleej Times)
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Gulf Air's restructuring plan is paying off as third-quarter financial and operational results show that Bahrain's national carrier is on track to achieve its annual targets.
Benefiting from a strong summer, optimised capacity management and cost efficiencies from the restructuring, Gulf Air's operating results were 24 percent better than forecast for the third quarter. This contributed to an overall year-on-year reduction in the airline's losses of more than 50 percent, keeping it firmly on target to cut its annual losses, said a report in the Gulf Daily News (GDN), our sister publication.
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," Deputy Prime Minister and the airline's chairman 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 per cent 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 per cent. 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 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 Haj season.
"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," Transportation Minister and Gulf Air's executive restructuring committee chairman Kamal Ahmed said.
"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."
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