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Old 19th November 2009 | 13:39
  #1429 (permalink)  
Krinkle
 
Joined: Jul 2007
Posts: 25
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From: manama
Er...

To an unschooled outsider like me, it looks like the airline is doing what it needs to do.

Remember, this company is losing $500 million a year and has been for some time. This in the 'least rich' GCC country - Bahrain only has a GDP of around $20 billion. The equivalent of one dollar in every 40 of that is ploughed into a failing airline. Money that could be going into schools or hospitals.

The government has made clear that Gulf Air is really in the last chance saloon this time, and is keen to get shot of it soon. That means turning a profit as quickly as possible. That means hacking back these routes that may contribute to Gulf Air's delusions of being a major international carrier but are bleeding red ink.

Profit is the name of the game, even if that means a fleet of two turboprops serving a few one horse towns in the Gulf. Bahrain has no divine right to a national carrier. Forget competing with Emirates etc, those days are gone, Gulf Air overtaken a decade ago while it was sleeping.

A pared down carrier, serving some less glamourous locations in Iraq, Iran etc makes better business sense. Then by all means once the books are balanced start adding glamour routes to Asia.

But what the hell is the value to the people of Bahrain of allowing this airline to spend tens of millions of dollars of their money flying three-quarter empty aircraft to far-off locales when there are far more pressing needs at home.

Majali comes with a good rep, and did a good job at Royal Jordanian. Ultimately he will succeed or fail on whether there is the political will to ride out all the gnashing of teeth that is sure to accompany the cuts to unproductive nationals that would be part of any credible turnaround plan.

Like I say, I don't know my arse from my elbow. But to express surprise that a company throwing away half a billion dollars a year is looking to make cut backs seems unreal.
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