Gulf Air to close 15 routes to be profitable by 2012

16 March 2010

Bahrain’s Gulf Air plans to reduce its $500m losses to zero in the next two years

Bahrain’s national carrier Gulf Air plans to close 10 to 15 less profitable routes in line with the airline’s plan to reach profitability by 2012.

The airline is now focussing on regional routes and destinations within a three-to-four hour flight time from Bahrain in order to try and reduce its losses from $500m last year to zero by 2012.

The airline will also launch 20 new routes in the next two years, including two new routes to Iraq. Flights to Basra and Suleimaniyah will both start in 2011 and the airline plans to fly to 56 cities and operate a 34-strong fleet by 2012.

Samer Majali, chief executive of Gulf Air, says that aside from Pakistan, Iran and central Asia, east Africa is also one of the planned new routes.

“It is not well-served currently but requires small airplanes to run on a more feasible basis,” Majali says.

Gulf Air is now simplifying its fleet and looking to acquire more narrow-body aircraft and regional jets, which are more profitable than operating wide-body aircraft.

The carrier aims to have 10 regional jets in its fleet by 2012 and is currently assessing all regional jets on the market from companies such as Canada’s Bombardier, Airbus and Brazil’s Embraer.

Gulf Air signed a contract with Embraer in January to lease two Embraer 170 aircraft with plans to acquire two more later this year (MEED 24:1:10).

The airline has already taken delivery of seven A320 aircraft and has sold two of the wide-body A340 aircraft as it focuses more on regional routes. Another three A340 aircraft are on the market to be sold.

Majali declined to comment on exactly how much money the airline will receive in funding from the government as it executes its plan, but he said that the financing will equate to a couple of years’ losses.

The Bahrain government is still studying plans to privatise the carrier.

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