Despite high fuel costs, and a budget blow out on fuel in the region of $100 million, Gulf Air is in good shape following strong growth in traffic and revenue during 2004, when the airline performed exceptionally well to reduce losses and debt levels to their lowest since 1989, says its president and chief executive officer James Hogan.
A record more than seven million passengers flew with Gulf Air and traffic figures at its three owning-state airports of Abu Dhabi, Bahrain and Muscat grew by 46 per cent, 36 per cent and 105 per cent respectively, while cargo revenue was up by 38 per cent and the seat factor by 3.8 points.
However, if fuel prices stay at the exceptionally high levels seen in 2004, further tough measures could be initiated in 2005, as witnessed in the airline axing two destinations, Colombo and Casablanca.
This concern is shared by other major airlines who have posted warnings about the negative impact the exceptionally high fuel prices have had on their businesses.
Gulf Air says it will continue to revisit its business plan and restructure, making the business decisions required to ensure that it adheres to the mandate to run the airline on a commercial basis.
Over the last two years, Gulf Air has turned around and positioned itself as challenger brand and innovator in the airline industry, says Hogan. It has set the pace and the standard for the future, he adds.
Travellers can expect the same level of innovation consistently delivered in the spirit of Arabian hospitality central to the Gulf Air brand.
Expansion will follow the outline for the last year of Project Falcon, the airline’s three-year strategic recovery plan. However, because Gulf Air operates on a strictly commercial platform, everything will necessarily be subject to and moderated by the trend in the price of fuel. It will continue to focus on product and service enhancements and delivery, the progressive improvement in yield, and the ongoing commitment to contain costs.
Gulf Air says that Investment in its brand, people, services and equipment will continue. Its network is under continuous review and will be expanded only subject to commercial viability. Where this cannot be achieved by Gulf Air operations, the airline hopes to work with partnerships to extend the scope of its network and offer passengers more choice and convenience.