Gulf Air begins restructuring process

20 January 2013

Airline aims to make cost savings of 24 per cent before end of 2013

The Bahrain-based Gulf Air has officially begun to restructure its loss-making business.

Through job cuts, a reduction in routes and a restructuring of its fleet, the airline is hoping to make cost savings of up to 24 per cent by the end of 2013.

The airline has already closed eight commercially unviable routes. Cancelled routes are Dhaka, Kathmandu, Copenhagen, Colombo, Rome, Kabul, Aden and Erbil.

It is realigning its business model and moving away from low-yield transit traffic, looking to concentrate on high-demand and high-yield point-to-point routes connecting Bahrain with regional markets.

Gulf Air will simplify its fleet and already announced in November last year that it cut orders for Airbus and Boeing aircraft. Its revised order book aims to reduce the airline’s long-term financial liability of approximately $5bn by 50 per cent.

Inevitably jobs will be lost as the airline’s routes and fleet are reduced. The airline confirms it will be looking to cut its workforce by 35 per cent, which will result in the loss of 1,200 jobs.

In October 2012, the struggling airline was bailed out by the government with a cash injection of BD185m ($494m).

 




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