Bahrain’s national carrier Gulf Air, which announced a restructuring strategy last December, spearheaded jointly by the airline’s Board of Directors led by its chairman Sheikh Khalid bin Abdulla Al Khalifa, the Deputy Prime Minister and the airline’s management, recorded restructuring progress within a month of its on-going implementation. Despite a difficult operating environment, the restructuring measures have started yielding results and the strategy remains on track to achieve overall cost savings of 24 per cent by the end of 2013.
In January 2013, through the implementation of prudent cost saving measures and an aggressive efficiency drive the airline reduced its overall losses by over 34 per cent compared to January 12, posted 9.6 per cent increase in passenger revenue against its budgeted revenue and, increased its yields by over eight per cent.
The airline also cut its expenditure significantly through reductions in aircraft lease fees, flight related charges, staff expenses and the closure of four loss-making routes.
Based on the current progress and the estimated forecasts, the restructuring plan is on track to achieve its cost savings target by the end of 2013. Indications are also strong that the Revenue per Available Seat Kilometre (RSK) will achieve the targeted nine per cent increase in 2013 through the establishment of robust performance frameworks designed to deliver greater efficiencies.
The realignment of the airline’s network to strengthen its Middle East and North Africa (MENA) operations progressed as planned in January with the closure of four loss making destinations. Gulf Air is expecting to complete its network realignment by March 2013. It will continue to strengthen its regional markets offering flexible and multiple flight options while providing strategic links to selected European, Far East and India markets.
The groundwork has been begun to simplify and align the airline’s fleet with its revised network requirements. Successful negotiations were concluded in January to return two leased regional Embraer E90 jets. Further negotiations are on-going to complete the fleet realignment by April 2013. The airline now operates an all Airbus fleet.
On the operational and customer service fronts Gulf Air has seen significant improvements in January 2013; the airline has been ranked among the top ten global airlines for its flight punctuality at 85 per cent and number one in the Middle East region.
With its renewed focus on enhancing customer service both on the ground and in the air, passenger compliments have increased by 25 per cent while complaints have reduced by 24 per cent in January 2013 against January 2012. The airline’s popular loyalty programme Falcon Flyers has also seen a nine per cent growth in its membership in January 2013.