Bahrain’s national carrier Gulf Air has said it has cut overall losses by 50 per cent in the first quarter of this year, compared with 2012 as it continues to restructure the business.

The drop in losses was a result of a 21 per cent cut in spending, after the airline negotiated reduced aircraft leasing fees, closed loss-making routes and reduced the size of its workforce.

A total of 1,200 jobs were expected to be cut during the restructuring, a move that has angered the airline’s trade unions.

The airline has been restructuring its business model for the past three months, following the BD185m ($494m) bailout granted by the government in October last year. The troubled airline ran into difficulties in 2011 when key routes were temporarily suspended by the Bahraini government during the political uprisings that year.

The Bahraini authorities banned flights to and from countries such as Iran and Iraq, due to fears that insurgents would fly into the country and incite further rioting.

Unfortunately the same routes were the airlines’ most profitable destinations.

The ban also played a role in the demise of the privately-owned Bahrain Air. Unable to secure a bailout, the airline went into voluntary liquidation earlier this year.

Bahrain Air’s absence from the market has helped bolster Gulf Air’s passenger numbers in the first quarter this year, with the company reporting a 21 per cent increase in passenger yield. 

Gulf Air has stated that it has completed the realignment of its network, with a focus on the Middle East and North African market, maintaining select routes to destinations in Europe and Asia.

The airline’s reduced fleet currently stands at 26 Airbus aircraft, with the average aircraft age of 4.7 years. It has completed negotiations with lessors to return surplus aircraft.