Optimistic outlook

TTN’s annual industry review takes stock of the airline and hotel businesses and comes up against an astonishing maturing of the markets

Even as Gulf Air migrates to a two-hub model, president and chief executive James Hogan tells TTN that the airline is flying confidently – with an eye on fuel prices

What’s Gulf Air’s plan for 2006?
The present aviation landscape defined in 2005 is unlikely to change in the short term. Predictions suggest that fuel prices will remain constant during 2006, and already intense competition will increase still further in the coming year, with ongoing capacity increases and further aggressive network expansion. Gulf Air thus enters the year under considerable pressure. While the programme of change outlined in Project Falcon has been completed there are new challenges, and we will proceed cautiously until the fuel price stabilises and the market corrects itself. We will however continue to consolidate our business in other areas and investment into further development and enhancement of air-ground-and electronic-products will continue.
In the light of Abu Dhabi’s withdrawal, the efficient restructuring of our network to a two-hub model by March will both simplify and optimize our operations going forward. Apart from the initial withdrawal and restructuring costs associated with this change, the new structure is expected to result in significant savings.

Is Gulf Air bullish about 2006?
Gulf Air is eyeing 2006 with cautious optimism. We have the full and unconditional support and commitment of Bahrain and Oman as we move towards a streamlined, more cost effective two-hub model. The enhanced network will provide more efficient and cost effective connectivity in and out of the region, building on the strength of our regional network.
2006 will see continued business re-engineering to build strength and flexibility into the business. The commercial platform we have established and our achievements in terms of debt reduction and yield improvement provide a positive base for future growth.

What can passengers look forward to in the new year?
Key air-related projects will include the introduction of First and Business class Skybeds on at least four A340 aircraft, the refurbishment of these and the remaining aircraft in the fleet, enhanced IFE programming, the completion of video hardware installation in three A320 aircraft, and continued enhancements to the Sky Chef and Sky Nanny programmes.