SPEAKING at the opening of World Travel Market in London, Gulf Air president and CEO James Hogan reported that despite high fuel costs, the airline was in good shape following strong growth in traffic and revenue during 2004.
“While we are cognisant of the challenges of the fuel price as we approach the new year, there is much to celebrate at Gulf Air as 2004 draws to a close,” he said. “This has been an exceptional year by anyone’s standards. The initiatives in Project Falcon – our turnaround programme commenced in January 2003 – continue to bear fruit, with the result that today we are on a sound financial footing. Gulf Air is on track to report record passenger numbers and revenue for this year, while debt is at its lowest since 1989. Like all airlines worldwide, the record fuel price is hitting us hard with costs amounting to BD35 million ($93 million) over our budget forecast for the year, but it has not diminished our determination and resolve to break even for the year.”
Following the commencement of Project Falcon, other key performance indicators show growth in passenger traffic out of the three hubs of Abu Dhabi, Bahrain and Oman by 46 per cent, 36 per cent and 105 per cent respectively, while cargo revenue is up by 38 per cent and the seat factor by 3.8 points.
However with fuel costs presently running at 75 per cent over budget and an average fuel budget overrun of more than 42.5 per cent for the year, he admitted there was a measure of disappointment in the fact that this would prevent the airline from recording a healthy profit. “While we are frustrated at not being in the black ahead of schedule, we recognise that rising fuel charges are just another hurdle to overcome and we will continue to look to the future and are constantly adjusting our business plan to manage the obstacles in our path to success.” He added that investment in the Gulf Air brand, in its people, services and equipment will continue unabated, and as such the $10 million investment in new First and Business class seats is on schedule for roll out in February 2005.
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