Hogan confident of GF recovery
James Hogan, president and chief executive of Gulf Air, said that despite this year being marked by crisis, conflict, and economic turbulence, the airline has every reason to be confident that it will weather these and other possible future storms and soon return to profitability.
At the same time he said he was in no doubt that Gulf Air will quickly re-attain its position as a leading airline of the world.
Hogan, addressing the Airline Internal Audit Conference, held in Dubai, said that change and reaction to altered consumer needs is central to Gulf Air’s turnaround.
“The start of this year has been exceptional by any standards following the war in Iraq and the SARS crisis. The effects of these events had a disastrous knock on consequences for economies around the world, impacting most business sectors, notably the airline and travel business,” he said.
“ However, it is not uncommon for businesses to be faced with unplanned obstacles and it is important to be fit enough to get over those hurdles.”
Hogan said that an involuntary consequence of this chain of events has been what is in reality an audit - a self-examination by both individuals and organisations of values, systems and processes.
“Apart from bringing to light inefficiencies and bad practice, the painful corporate stock taking revealed systemic problems within the industry, such as outdated practices, systems that are too rigid and structures that block growth,” he said. “What is critical for all of us in the service industry is that we look to change and adapt to take our businesses forward. And following this global downturn in tourism, we have to identify the gaps in operations, as we - and the customer - embark on a journey of change.”
He admitted that lessons will be learned from business operations over the first months of 2003 and said: “We all have to make sure our business processes are strong, so we can re-shape the structure to pass on the best possible benefit directly to the customer.”
Hogan added that he believed Gulf Air was better placed than most to make a quick recovery from the downturn.
“Although we are not even half way through our three-year turnaround strategy, the changes we have implemented to date have made a quantifiable difference to the commercial operation of the airline,” he said. “In reshaping Gulf Air to operate in the competitive market, it is our aim to be distinguishable from our competitors. Every decision we make has a focus - the customer - but no single generic customer.”
And the airline is winning the battle. Net loss is expected to be down to BD20 million from BD52 two years ago and in 2004 Gulf Air will break even.
“The return of passengers is the most powerful endorsement of our customer-centric strategy,” concludes Hogan. “Precise market segmentation and a programme to serve each segment more precisely has been key to this success and to the process of recapturing our market share.”
In line with a network plan designed to offer daily frequencies to an increasing number of destinations, the year has been characterised by aggressive network growth and the addition of new destinations and more flights out of Gulf Air’s three gateways.
The year to date has also witnessed significant technological advances, all of which are in line with the objectives and plans outlined in Project Falcon - the airline’s recovery strategy. The first of these was the introduction of SMS travel notification to Gulf Air travellers across the network. And in July, Gulf Air became the first airline in the Middle East to introduce electronic check-in kiosks.