any information on that??
Bahrain's Gulf Air may renegotiate plane orders with Airbus and Boeing, the carrier's recently-appointed chief executive Samer Majali said.
The struggling airline, which is fully owned by the Bahraini sovereign wealth fund Mumtalakat, also said it was open to merging with other airlines, but is not in talks yet.
Speaking to Reuters in a telephone interview, Majali said the company would "honour the terms of the contract" with manufacturers but may negotiate amending airplane numbers and sizes. Gulf Air has 35 Airbus and 24 Boeing aeroplanes on order.
Majali said passenger numbers were down 3 percent in the first seven months of 2009, while yields were 15 to 20 percent lower, compared with the same period last year. Capacity deployment is "very tight", said Majali, who hopes to achieve results close to last year's in the second half.
"Yields are still quite low and I'm not sure anything, globally speaking, has put major brakes on yields," he said.
The airline has seen three chief executives attempt to turn its loss-making operations around since 2002, cutting jobs and realigning its network as previous shareholders Abu Dhabi, Qatar and Oman gave up their stakes in the ailing carrier.
In 2007, the airline cut jobs and trimmed its network after reporting losses of more than $1 million a day.
Gulf Air, Bahrain’s national carrier, has started reviewing its business model and will put in place a new plan of action with a series of clear recommendations by the end of the year, its new CEO said.
The ailing airline will undertake a comprehensive engagement process with all key stakeholders and audiences including customers, employees, the Gulf Air Union, the business community and government, Samer Majali told a Press conference today.
Outlining the restructuring process, Majali highlighted that the objective was to develop a sustainable business that served the needs of the travelling public and supported the growth of the national economy.
Earlier, speaking to various sections of the Gulf Air staff at a meeting hosted by Talal Al Zain, Gulf Air chairman and chief executive of Mumtalakat, the investment arm of the Government of Bahrain, which owns the airline, Majali said: ‘As Gulf Air approaches its 60th anniversary we have much to celebrate. We are a recognised global brand, with a significant pioneering heritage and a wealth of experience in connecting the region with the rest of the world.’
Majali said the international aviation industry is facing a unique set of challenging circumstances, including the global economic slowdown, the significant fluctuations in fuel prices as well as the increased competition in the regional market. Given these difficult circumstances, there is a greater need for change and the need to develop a strategy that delivers Gulf Air’s future aspirations, he added.
“Gulf Air has not implemented a comprehensive strategy review since we became the national airline, which is only responsible for the future travel and business needs of the Kingdom of Bahrain. Gulf Air is currently not sustainable and is receiving subsidies, which could otherwise be invested in other parts of the national economy,” he said.
Addressing speculation about staff redundancies, he said no decisions have been made yet and it would be premature to say anything now as this was the purpose of the review.
He confirmed that his priority is to complete the review process and to determine the future direction of the airline once it had been completed. Until then there will be no change in the daily operations of the airline.
Majali said: ‘A key priority is to safeguard jobs. Gulf Air has an enviable pool of talent, expertise and knowledge. We need to secure this asset as an integral part of the airline’s business and long-term future. But we cannot rely on government subsidy indefinitely so we also need to build a self-sufficient and commercially successful airline. Saving jobs for Bahraini nationals and all our hard working staff is important and a successful transition will result in more job security, more benefits, investment and other opportunities that deliver a better service for Gulf Air customers. It will also enable us to be a better partner of choice for the business community, our partners and suppliers.
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Talal Al Zain confirmed Mumtalakat’s support for the business review, stating: ‘Mumtalakat has a responsibility to the Government and to the people of Bahrain to make sure our national assets are being managed efficiently and effectively, helping to drive our national aspirations as highlighted within the Bahrain Vision 2030.’
In welcoming the new CEO to Gulf Air, Al Zain highlighted Majali’s considerable experience in working within the aviation industry in the Middle East and his track record as previous CEO of Royal Jordanian. He said: ‘He has already turned a national airline dependent on Government support into a self sufficient and profitable airline.”