Gulf Air has met its objectives for the first year of a three-year strategic recovery programme in its journey of change, it was announced.
The losses have dropped dramatically from BD42 million ($111.7 million) and the airline will meet the end-of-year target figure of BD20 million, board chairman and Finance and National Economy Minister Abdulla Saif told a Press conference after a board meeting.
Saif said the board had endorsed the results of the first year of the airline’s three-year recovery programme.
Speaking at the Ritz-Carlton Bahrain Hotel and Spa, Saif said the airline’s owning states - Bahrain, Oman and Abu Dhabi - had reiterated their commitment to continue supporting Gulf Air.
As decided earlier, the shareholders will inject another BD45 million of capital into the airline before the end of 2004.
“Despite competition posed by new regional airlines, Gulf Air’s future is bright because of the quality of its products and the strength of its routes and network,” said Saif.
“I am immensely proud of the noticeable turnaround in Gulf Air’s fortunes.”
The board also decided to sell the airline’s assets in London to improve its cash flow.
Gulf Air’s office in central London and land at Heathrow will be sold shortly and are expected to raise BD13 million.
The airline will then move to rented premises in Hammersmith, west London, said president and chief executive James Hogan.
He said the sale of these assets was entirely separate from the airline’s success in halving its losses.
Saif also said the airline is committed to sustaining its performance through a strategy of cost-effectiveness, route efficiency and yield improvement.
“We have reduced the losses by 50 per cent and Gulf Air will come in on target at BD20 million, and are committed to breaking even next year,” Saif declared.
“I am immensely proud of the noticeable turnaround in Gulf Air’s fortunes.
“In the face of daunting challenges, not the least of which were the objectives set for the year in the strategic recovery programme, we have performed well at every level.”
The airline, said Saif, has significantly improved its financial position and registered positive growth against a global backdrop of layoffs, downsizing and network and capacity cuts.
“I would like to congratulate the entire management team and the staff at Gulf Air on a remarkable performance, and thank them for their dedication and loyalty,” he added.
The board reviewed the airline’s performance over a year in which the industry has faced unprecedented challenges, including regional tensions and the Sars virus, which affected performance in the second quarter of the year, said Saif.