Gulf Air Announces Profit for 2004, GF Reports Best Performace Since 1997
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Gulf Air Announces Profit for 2004, GF Reports Best Performace Since 1997
http://www.gulfairco.com/press/NewsDetails.asp?hID=669
Gulf Air recorded a profit of BD1.5 million (USD4.0 million) in the calendar year to December 2004, compared to loss of BD19.9 million (USD 52.8 million) in 2003.
Kudos to GF !
************************************************************ ****************************************
GULF AIR BACK IN THE BLACK WITH BEST FINANCIAL RESULTS SINCE 1997
25 Apr,2005
Airline remains ahead of Project Falcon turnaround targets for third year in a row despite BD30 million (USD80 million) impact of fuel prices
2004 Financial Highlights
· Net profit of BD1.5 million (USD4.0 million) compared to loss of BD19.9 million (USD 52.8 million) in 2003
· Turnover up 23.8 per cent to BD476.3 million (USD1.26 billion ) (2003: BD384.6 million / USD1,020.2 million)
· Debt reduced by 7.8 per cent or BD41.7 million (USD110.6 million), the debt:equity ratio is thus 2.4
· Profits achieved despite fuel prices being BD30 million (USD80 million) over budget.
Operational Highlights
· Passenger numbers up 23.8 per cent to a record 7.48 million
· Seat factor up from 68.1 per cent to 71.4 per cent
· Passenger revenues up 28.2 per cent to BD405.3 million (USD1.075 billion) (2003: BD316.2 million / USD839 million)
· Cargo revenues up 20.4 per cent to BD53.3 million (USD141.4 million) (2003: BD44.3 million / USD117.5 million)
· RPKs up 32.5 per cent to 17,863.3 (2003: 13,481.6)
Key Business Initiatives
· USD10 million in sky beds begins roll-out
· Better for business campaign targets increased premium traffic
· Sky Chefs and Sky Nannies retain world-leading position
· New award-winning lounges in Bahrain and Heathrow
Gulf Air today announced a return to profit with its best financial performance since 1997. Despite a BD30 million (USD80 million) cost to the business through fuel price rises during the year, Gulf Air recorded a profit of BD1.5 million (USD4.0 million) in the calendar year to December 2004, on revenues up 23.8 per cent to BD476.3 million (USD1.26 billion) (2003: BD 384.6 million / USD1,020.2 million).
The results mean Gulf Air, the national airline of the Kingdom of Bahrain, the Emirate of Abu Dhabi and the Sultanate of Oman, has out-performed the targets set under Project Falcon, the three-year restructuring plan approved by the Board in December 2002.
James Hogan, the airline’s President and Chief Executive said:
“Despite an exceptionally difficult operating environment, in which fuel prices meant a USD80 million over-budget cost to the business, we are proud to report the best financial results at Gulf Air since 1997.
“Our strategy of increasing passenger numbers and revenues through world-class product and service delivery, coupled with tight cost control management, has changed the Gulf Air business beyond all recognition.
“We now have a business built on sustainable foundations which can compete with – and win against – the very best in the world.”
In 2004, revenue passenger numbers rose by 23.8 per cent from 6,046,468 in 2003 to peak at 7,484,588 by the end of the year. Revenue Passenger Kilometre (RPKs) increased by 32.5 per cent whilst Available Seat Kilometres (ASKs) rose by 26.4 per cent. The seat factor meanwhile rose to 71.4 per cent compared to 68.1 per cent in 2003 – another record – whilst Gulf Traveller, the all-economy subsidiary, recorded an average load factor of 75.8 per cent across its 17-destination network.
Passenger revenue increased by 27.0 per cent over 2003, largely driven by the 24.3 per cent increase in premium passengers carried in 2004. Similar growth was seen in cargo where the structural changes were immediately reflected in the 20.4 per cent growth in revenue.
Gulf Air’s improved financial health is also evident in its reduced debt burden. In 2004, BD41.7 million (USD110.6 million) was paid to financial institutions. This represents a decrease of 7.8 per cent, and means that at 2.4, the airline’s debt to equity ratio is now below the limit of 3.0 that was set under Project Falcon.
James Hogan continued: “The measure of our success lies not only in the numbers, but is evident in the renewed confidence in Gulf Air within the financial markets and among our industry partners.
“We have been active in the global business arena, successfully negotiating a USD65 million credit facility from a seven-bank syndicate led by Standard Chartered Bank, signed a new joint venture agreement with world-leader, Sabre Inc, and another equally important USD138 million agreement with Lufthansa Technik for the provision of component maintenance services.
“Ultimately, the airline business is about the customer. We have invested in and delivered world-class products and world-first initiatives directly aimed at serving or customers better, and putting Gulf Air in a tiny group of airlines that lead, not follow, in developing their products.”
“This investment is also evident in the new corporate identity and the ongoing rebranding programme that is repositioning Gulf Air as a distinctive, contemporary airline with a modern Arabian look and feel. This has been accompanied by significant investments in our IT infrastructure at the unique world wide contact centre in Oman and in the implementation of state-of-the-art enterprise software systems that simplify and streamline processes and the use of our human resources.
“The current climate is going to demand still more of our people and resources. The operating environment is tougher and more competitive than it was two years ago. 2005 is likely to see competitor activity intensify on all fronts, with the introduction of new aircraft, new destinations and aggressive marketing. Added to this we will have to manage the record fuel prices, which if unaddressed, have the potential to erode the progress we have made to date,” he said.
“I believe we have proved our credentials not only in corporate transparency and strict fiscal discipline but also in honouring our Project Falcon commitment to our shareholding owner states. Gulf Air is leaner and more flexible to take on these challenges,” he continued. “However moving forward, and on the back of these results, I also believe there is a strong argument for privatisation. This will generate the kind of capital we need to re-equip the airline to compete effectively in the region.”
Mr. Hogan also acknowledged the staff at Gulf Air who have been instrumental in meeting the airline’s objectives over the last two years, noting that the airline’s nationalisation and succession planning strategy was achieving significant success with unique programmes to recruit, develop and train Gulf nationals from its three owner states to take up positions of leadership in the Gulf Air of the future and to play a meaningful role in their respective communities and regional economies.
In closing he thanked the three shareholding owner states and Board members for their ongoing commitment to the success of the turnaround and Gulf Air’s performance in the year.
About Gulf Air
Gulf Air was founded in 1950. Today, it is owned by the Kingdom of Bahrain, Oman and the Emirate of Abu Dhabi and is the only truly pan Gulf carrier in the region. The airline’s network stretches from Europe to Asia and covers 44 cities in 30 countries. The fleet is one of the most modern in the Middle East and comprises 34 aircraft.
The airline is in the last year of a three-year strategic recovery programme, headed by President and Chief Executive, James Hogan. The airline, which is making rapid strides towards regaining profitability in 2005, aims to further evolve by taking its renowned cultural strengths, which have been gained over more than half a century, into a global environment.
The dramatic turnaround in Gulf Air’s fortunes has won international recognition. In January 2004, The Centre for Asia Pacific Aviation (CAPA) presented the airline with the prestigious Airline Turnaround of the Year Award for 2003. Gulf Air was also the recipient of the 2003 Platinum Award for the Best Airline in the Middle East and North Africa, recognising the airline’s commitment to service excellence.
Winner - Middle East and North African Platinum Best Airline Travel Award 2004
Winner - Skytrax Most Improved Airline Award 2004
Winner - Skytrax Best First Class Onboard Food Category 2004
Winner - Skytrax Best Business Class Check-in Category 2004
Official Airline and Sponsor of the Gulf Air Bahrain Grand Prix 2005
Gulf Air recorded a profit of BD1.5 million (USD4.0 million) in the calendar year to December 2004, compared to loss of BD19.9 million (USD 52.8 million) in 2003.
Kudos to GF !
************************************************************ ****************************************
GULF AIR BACK IN THE BLACK WITH BEST FINANCIAL RESULTS SINCE 1997
25 Apr,2005
Airline remains ahead of Project Falcon turnaround targets for third year in a row despite BD30 million (USD80 million) impact of fuel prices
2004 Financial Highlights
· Net profit of BD1.5 million (USD4.0 million) compared to loss of BD19.9 million (USD 52.8 million) in 2003
· Turnover up 23.8 per cent to BD476.3 million (USD1.26 billion ) (2003: BD384.6 million / USD1,020.2 million)
· Debt reduced by 7.8 per cent or BD41.7 million (USD110.6 million), the debt:equity ratio is thus 2.4
· Profits achieved despite fuel prices being BD30 million (USD80 million) over budget.
Operational Highlights
· Passenger numbers up 23.8 per cent to a record 7.48 million
· Seat factor up from 68.1 per cent to 71.4 per cent
· Passenger revenues up 28.2 per cent to BD405.3 million (USD1.075 billion) (2003: BD316.2 million / USD839 million)
· Cargo revenues up 20.4 per cent to BD53.3 million (USD141.4 million) (2003: BD44.3 million / USD117.5 million)
· RPKs up 32.5 per cent to 17,863.3 (2003: 13,481.6)
Key Business Initiatives
· USD10 million in sky beds begins roll-out
· Better for business campaign targets increased premium traffic
· Sky Chefs and Sky Nannies retain world-leading position
· New award-winning lounges in Bahrain and Heathrow
Gulf Air today announced a return to profit with its best financial performance since 1997. Despite a BD30 million (USD80 million) cost to the business through fuel price rises during the year, Gulf Air recorded a profit of BD1.5 million (USD4.0 million) in the calendar year to December 2004, on revenues up 23.8 per cent to BD476.3 million (USD1.26 billion) (2003: BD 384.6 million / USD1,020.2 million).
The results mean Gulf Air, the national airline of the Kingdom of Bahrain, the Emirate of Abu Dhabi and the Sultanate of Oman, has out-performed the targets set under Project Falcon, the three-year restructuring plan approved by the Board in December 2002.
James Hogan, the airline’s President and Chief Executive said:
“Despite an exceptionally difficult operating environment, in which fuel prices meant a USD80 million over-budget cost to the business, we are proud to report the best financial results at Gulf Air since 1997.
“Our strategy of increasing passenger numbers and revenues through world-class product and service delivery, coupled with tight cost control management, has changed the Gulf Air business beyond all recognition.
“We now have a business built on sustainable foundations which can compete with – and win against – the very best in the world.”
In 2004, revenue passenger numbers rose by 23.8 per cent from 6,046,468 in 2003 to peak at 7,484,588 by the end of the year. Revenue Passenger Kilometre (RPKs) increased by 32.5 per cent whilst Available Seat Kilometres (ASKs) rose by 26.4 per cent. The seat factor meanwhile rose to 71.4 per cent compared to 68.1 per cent in 2003 – another record – whilst Gulf Traveller, the all-economy subsidiary, recorded an average load factor of 75.8 per cent across its 17-destination network.
Passenger revenue increased by 27.0 per cent over 2003, largely driven by the 24.3 per cent increase in premium passengers carried in 2004. Similar growth was seen in cargo where the structural changes were immediately reflected in the 20.4 per cent growth in revenue.
Gulf Air’s improved financial health is also evident in its reduced debt burden. In 2004, BD41.7 million (USD110.6 million) was paid to financial institutions. This represents a decrease of 7.8 per cent, and means that at 2.4, the airline’s debt to equity ratio is now below the limit of 3.0 that was set under Project Falcon.
James Hogan continued: “The measure of our success lies not only in the numbers, but is evident in the renewed confidence in Gulf Air within the financial markets and among our industry partners.
“We have been active in the global business arena, successfully negotiating a USD65 million credit facility from a seven-bank syndicate led by Standard Chartered Bank, signed a new joint venture agreement with world-leader, Sabre Inc, and another equally important USD138 million agreement with Lufthansa Technik for the provision of component maintenance services.
“Ultimately, the airline business is about the customer. We have invested in and delivered world-class products and world-first initiatives directly aimed at serving or customers better, and putting Gulf Air in a tiny group of airlines that lead, not follow, in developing their products.”
“This investment is also evident in the new corporate identity and the ongoing rebranding programme that is repositioning Gulf Air as a distinctive, contemporary airline with a modern Arabian look and feel. This has been accompanied by significant investments in our IT infrastructure at the unique world wide contact centre in Oman and in the implementation of state-of-the-art enterprise software systems that simplify and streamline processes and the use of our human resources.
“The current climate is going to demand still more of our people and resources. The operating environment is tougher and more competitive than it was two years ago. 2005 is likely to see competitor activity intensify on all fronts, with the introduction of new aircraft, new destinations and aggressive marketing. Added to this we will have to manage the record fuel prices, which if unaddressed, have the potential to erode the progress we have made to date,” he said.
“I believe we have proved our credentials not only in corporate transparency and strict fiscal discipline but also in honouring our Project Falcon commitment to our shareholding owner states. Gulf Air is leaner and more flexible to take on these challenges,” he continued. “However moving forward, and on the back of these results, I also believe there is a strong argument for privatisation. This will generate the kind of capital we need to re-equip the airline to compete effectively in the region.”
Mr. Hogan also acknowledged the staff at Gulf Air who have been instrumental in meeting the airline’s objectives over the last two years, noting that the airline’s nationalisation and succession planning strategy was achieving significant success with unique programmes to recruit, develop and train Gulf nationals from its three owner states to take up positions of leadership in the Gulf Air of the future and to play a meaningful role in their respective communities and regional economies.
In closing he thanked the three shareholding owner states and Board members for their ongoing commitment to the success of the turnaround and Gulf Air’s performance in the year.
About Gulf Air
Gulf Air was founded in 1950. Today, it is owned by the Kingdom of Bahrain, Oman and the Emirate of Abu Dhabi and is the only truly pan Gulf carrier in the region. The airline’s network stretches from Europe to Asia and covers 44 cities in 30 countries. The fleet is one of the most modern in the Middle East and comprises 34 aircraft.
The airline is in the last year of a three-year strategic recovery programme, headed by President and Chief Executive, James Hogan. The airline, which is making rapid strides towards regaining profitability in 2005, aims to further evolve by taking its renowned cultural strengths, which have been gained over more than half a century, into a global environment.
The dramatic turnaround in Gulf Air’s fortunes has won international recognition. In January 2004, The Centre for Asia Pacific Aviation (CAPA) presented the airline with the prestigious Airline Turnaround of the Year Award for 2003. Gulf Air was also the recipient of the 2003 Platinum Award for the Best Airline in the Middle East and North Africa, recognising the airline’s commitment to service excellence.
Winner - Middle East and North African Platinum Best Airline Travel Award 2004
Winner - Skytrax Most Improved Airline Award 2004
Winner - Skytrax Best First Class Onboard Food Category 2004
Winner - Skytrax Best Business Class Check-in Category 2004
Official Airline and Sponsor of the Gulf Air Bahrain Grand Prix 2005
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I dunno, but from what I've seen so far, Paul Hogan has done a pretty nice job of turning the airline around. His 3-year turnaround plan is in its last year, and they have achieved (if not surpassed) all their goal points. Even with the high fuel prices, they have turned a profit.
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Easy when you know how!
Sell off the last of the assets and get a good US$31M kick-back from new joint ventures that position the long term viabilty of the company rather procariously.
Rumour is it Hogie has lost the plot somewhat with more than your average number of 'shoot from the hip' emotional and egotistical decisions.
Corruption is still rife, and from the (very) top down.
Privatisation? With financial ratios the way they are (3:1 Debt to Equity and goodness knows what the current ratio is - that's assets:liabilities) who with any sense would invest?
Sell off the last of the assets and get a good US$31M kick-back from new joint ventures that position the long term viabilty of the company rather procariously.
Rumour is it Hogie has lost the plot somewhat with more than your average number of 'shoot from the hip' emotional and egotistical decisions.
Corruption is still rife, and from the (very) top down.
Privatisation? With financial ratios the way they are (3:1 Debt to Equity and goodness knows what the current ratio is - that's assets:liabilities) who with any sense would invest?
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equity
When James and his team joined debt was 14 dollars for every dollar in equity. So not only do they turn a profit in but the liability figure has drastically changed. Those of you who think that there is corruption should put forward facts, and before you mention GF, please look no further than EK, QR and EY. The latter's management being the ones who left GF in debt in the first place. James Hogan's team prides itself for its transparency and for establishing modern effective working methods, they have brought back credibility to GF and have given it a new lease on life from being on the verge of closure 3 years ago.
I see Gulf air today as the airline with probably the best service, whatever they promise they deliver, I am afraid I cannot say the same of the other regional carriers.
Take note and watch this space!
I see Gulf air today as the airline with probably the best service, whatever they promise they deliver, I am afraid I cannot say the same of the other regional carriers.
Take note and watch this space!
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gccpro,
I posted elsewhere in this forum sometime ago something about the Gulf carriers and basically lead to the same conclusion.
GF has probably done through the last 3 yrs something that will give them a leading advantage in the years to come if this part of the world is to become competitive and state subsidies FREE.
Easier said than done, but if the Gulf competitors throughout the world and their respective governments start imposing certain gradual restrictions to the non-compliant ones (stealthy state funded), something will have to change, and GF may have that competitive edge (home work done earlier). And I really hope things change in that direction. I'll give it a couple of years, max 3.
Just watch what's happening in "the textile world" for one. And we are not talking about just any country. It's China, the future superpower... If superpower is offensive let's say the future world's biggest (economic) power house.
QR, EY and somewhat EK cannot continue window-dressing as non-state companies when we all know what they are. SV, KU, WY and G9 live "in worlds" of their own for the time being.
Ref corruption and bribing, well call it lobbying and leads to the same with a more posh name. There was, is and will be always lobbying in different forms in the business community being aviation or anything else. GF is not immune to it
A WTO official said the other day in the UAE that local employees' remuneration should be equal for all (nationals and others). I don't think this will change though.
We all know the salary differences based on the origin of the employee let alone the 10, 15 or 25% pay hike.
This is really an internal issue and if now and then we'll still have "low pay sweat shops", it's because there is "an offer bigger than the demand".
I call the QUITs now. Safe flying to all!
I posted elsewhere in this forum sometime ago something about the Gulf carriers and basically lead to the same conclusion.
GF has probably done through the last 3 yrs something that will give them a leading advantage in the years to come if this part of the world is to become competitive and state subsidies FREE.
Easier said than done, but if the Gulf competitors throughout the world and their respective governments start imposing certain gradual restrictions to the non-compliant ones (stealthy state funded), something will have to change, and GF may have that competitive edge (home work done earlier). And I really hope things change in that direction. I'll give it a couple of years, max 3.
Just watch what's happening in "the textile world" for one. And we are not talking about just any country. It's China, the future superpower... If superpower is offensive let's say the future world's biggest (economic) power house.
QR, EY and somewhat EK cannot continue window-dressing as non-state companies when we all know what they are. SV, KU, WY and G9 live "in worlds" of their own for the time being.
Ref corruption and bribing, well call it lobbying and leads to the same with a more posh name. There was, is and will be always lobbying in different forms in the business community being aviation or anything else. GF is not immune to it
A WTO official said the other day in the UAE that local employees' remuneration should be equal for all (nationals and others). I don't think this will change though.
We all know the salary differences based on the origin of the employee let alone the 10, 15 or 25% pay hike.
This is really an internal issue and if now and then we'll still have "low pay sweat shops", it's because there is "an offer bigger than the demand".
I call the QUITs now. Safe flying to all!
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Vry well put "fractional" let's see if the other carriers in the region are "dragged kicking and screaming into the 21st century" so to speak.
