Gulf Air, once the Middle East’s biggest carrier, reduced annual losses by half and reported its best result in eight years after cutting jobs, retiring 14 planes and scrapping eight unprofitable routes.
Bahrain’s national airline cut the loss by more than 100mn dinars ($265mn) from a year earlier, a performance that surpassed its restructuring target by 14.5mn dinar, according to a statement yesterday. It didn’t provide a breakdown of the actual earnings for the year.
Under a turnaround plan introduced in December 2012, Gulf Air cut annual costs 28%, with the workforce declining by the same degree. Other measures including the renegotiation of 2,000 supplier deals. The carrier also introduced five new destinations and boosted frequencies on eight existing routes, helping to lift yields, a measure of pricing, by 14%.
“Gulf Air’s financial trajectory took a positive upswing in 2013 following the successful implementation of a balanced restructuring plan,” said Sheikh Khalid bin Abdalla al-Khalifah, Bahrain’s deputy prime minister and the carrier’s chairman. “Within one year and against the backdrop of a challenging operational environment this is a significant achievement.”
Gulf Air has reined in losses after focusing more on local point-to-point services, calling a halt to efforts to compete with the Middle Eastern “big three” of Emirates, Qatar Airways and Etihad Airways in the long-haul transfer market. The carrier was forced to address its long-term viability after the government told it to shrink operations or face closure. Acting chief executive officer Maher Salman al-Musallam said in the statement that the requirement for treasury resources has already been reduced.