Investment in the Gulf Air brand will continue


What is Gulf Air’s plan for 2005?
Expansion will follow the outline for the last year of Project Falcon, our three-year strategic recovery plan. However, because we operate on a strictly commercial platform, everything will necessarily be subject to and moderated by the trend in the price of fuel.

We will continue to focus on product and service enhancements and delivery, the progressive improvement in yield, and the ongoing commitment to contain costs.
Investment in the Gulf Air brand, in its people, services and equipment will continue, and as such the $10 million investment in new First and Business Class seats is on schedule for roll out in February.
The network is under continuous review and will be expanded to meet market requirement but subject to commercial viability. Where this cannot be achieved by Gulf Air operations, we work with partnerships subject to commercial and code-share agreements to extend the scope of our network and offer our passengers more choice and convenience.

Is Gulf Air bullish about 2005? If yes, why?
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. A record more than seven million passengers flew with Gulf Air and traffic figures for the three owning state airports of Abu Dhabi, Bahrain and Oman grew 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, if fuel prices stay at the exceptionally high levels we have seen in 2004, some tough measures will be required during the new year. This concern is shared by other major airlines worldwide who have posted warnings about the negative impact the exceptionally high fuel prices have had on their respective businesses.
We will continue to revisit our business plan and restructure, making the business decisions required to ensure that we adhere to our mandate to run Gulf Air on a commercial basis. We are confident that given our reputation for innovation, energy and strong customer focus, and within the commercial framework we have established, we will be able to overcome whatever challenges 2005 may bring.

What can passengers look forward to in the new year?
Over the last two years, Gulf Air has turned around and positioned itself as challenger brand and innovator in the airline industry. We have set the pace and the standard for the future. Travellers can expect the same level of innovation consistently delivered in the spirit of Arabian hospitality central to the Gulf Air brand.
The industry as a whole will face the challenge of fuel and increased competition from proliferating low-cost airlines. Both of these factors are likely to drive the growth and shape of the airline industry in 2005.