Current Gulf Air issues (threads merged)
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Official..no More Rumours........
Dear Colleagues,
عربي
On Sunday, 8 April 2007 the Board of Directors unanimously approved our restructuring plan aimed at securing the future of Gulf Air to the benefit of the economy and the people of the Kingdom of Bahrain and the Sultanate of Oman.
To make this possible, shareholders have committed to a capital injection into our company to cover past costs as well as financing the restructuring and investments for future development.
The restructuring plan includes far reaching measures to improve the profitability of our company and to stop the significant losses that occur each day.
These measures include the downsizing of the current fleet from 34 to 28 aircraft, creating an all Airbus fleet, and no longer using our own aircraft to fly to some unprofitable destinations.
For the customer, the plan seeks to improve punctuality, reduce the transit time between connecting flights and improve the range of connections.
The organisation of Gulf Air will also be simplified. It will consist of four divisions (see chart). Each of those will be headed by an Executive Vice President:
Finance and Administration: Ismail Karimi
Network: Hashim Mahmood (Acting)
Sales and Marketing Lee Shave
Operations: Bjorn Naef
To get the restructuring under way, management has set up a special task force to coordinate the many projects that are needed. Also, specific actions are being undertaken to address immediate operational issues along our defined priorities: Safety, punctuality, customer service and profitability. Executive management and vice presidents meet every morning to monitor the progress and to look at shortcomings. Next week, further details of the restructuring plan will be presented.
We are aware that the restructuring will have negative implications for many of you. But if Gulf Air is to survive, we need a dramatic cultural and operational shift inside our company. On all levels of the organisation we need a total commitment to eliminate shortcomings, to improve our quality of service and product and, above all, to work as a team. Only then will we be able to achieve our turn-around and secure the future of Gulf Air. It is in our hands, and we can do it!
For the Executive Management
André Dose
President and Chief Executive
عربي
On Sunday, 8 April 2007 the Board of Directors unanimously approved our restructuring plan aimed at securing the future of Gulf Air to the benefit of the economy and the people of the Kingdom of Bahrain and the Sultanate of Oman.
To make this possible, shareholders have committed to a capital injection into our company to cover past costs as well as financing the restructuring and investments for future development.
The restructuring plan includes far reaching measures to improve the profitability of our company and to stop the significant losses that occur each day.
These measures include the downsizing of the current fleet from 34 to 28 aircraft, creating an all Airbus fleet, and no longer using our own aircraft to fly to some unprofitable destinations.
For the customer, the plan seeks to improve punctuality, reduce the transit time between connecting flights and improve the range of connections.
The organisation of Gulf Air will also be simplified. It will consist of four divisions (see chart). Each of those will be headed by an Executive Vice President:
Finance and Administration: Ismail Karimi
Network: Hashim Mahmood (Acting)
Sales and Marketing Lee Shave
Operations: Bjorn Naef
To get the restructuring under way, management has set up a special task force to coordinate the many projects that are needed. Also, specific actions are being undertaken to address immediate operational issues along our defined priorities: Safety, punctuality, customer service and profitability. Executive management and vice presidents meet every morning to monitor the progress and to look at shortcomings. Next week, further details of the restructuring plan will be presented.
We are aware that the restructuring will have negative implications for many of you. But if Gulf Air is to survive, we need a dramatic cultural and operational shift inside our company. On all levels of the organisation we need a total commitment to eliminate shortcomings, to improve our quality of service and product and, above all, to work as a team. Only then will we be able to achieve our turn-around and secure the future of Gulf Air. It is in our hands, and we can do it!
For the Executive Management
André Dose
President and Chief Executive
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Expect in the next 24-48hrs news of which routes will be dropped - rumour has it that SIN, SYD, CGK, HKG, JNB, DUB and possibly ATH, IST.
BUT GF likely to operate some new destinations that have the potential to be profit making.
BUT GF likely to operate some new destinations that have the potential to be profit making.
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First World, Second World, Third World. I am not even going to get into a debate in trying to qualify these very unclear titles. A Google search will reveal plenty of sites with rambling discussions about what these normally titles (often with political-alliance overtones) mean when applied to countries.
From a purely business standpoint, the proverb is that "money talks & B.S. walks."
If Gulf Air was yours, including it's profits and debts, and you could increase profit by deploying the entire fleet on flights to a country like, say, India, or China, you would. There are no shortage of airlines who have lost their shirts in so-called "First World" countries such as the United States or Australia, while markets like India and China are the lands of opportunity for aviation.
As a stakeholder (an employee) of Gulf Air, I really don't care much where we fly to-- sure, I would love to have 3 day nightstops in Dublin or Johannesburg, even better if we could have 5-days in Bangkok, but it doesn't mean much if this is an unsustainable model. Better for the Company to do well even if it means flying to less attractive (from my standpoint) destinations, make more money, pass along the benefits to us in the form of higher salaries & good benefits. Then I will visit these places on my vacation days.
P.S., one place that I would be unwilling to fly to under the current situation is Bagdhad.
From a purely business standpoint, the proverb is that "money talks & B.S. walks."
If Gulf Air was yours, including it's profits and debts, and you could increase profit by deploying the entire fleet on flights to a country like, say, India, or China, you would. There are no shortage of airlines who have lost their shirts in so-called "First World" countries such as the United States or Australia, while markets like India and China are the lands of opportunity for aviation.
As a stakeholder (an employee) of Gulf Air, I really don't care much where we fly to-- sure, I would love to have 3 day nightstops in Dublin or Johannesburg, even better if we could have 5-days in Bangkok, but it doesn't mean much if this is an unsustainable model. Better for the Company to do well even if it means flying to less attractive (from my standpoint) destinations, make more money, pass along the benefits to us in the form of higher salaries & good benefits. Then I will visit these places on my vacation days.
P.S., one place that I would be unwilling to fly to under the current situation is Bagdhad.
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I really do think these are desperate times for GF. It's market is being erroded on all fronts..Long Haul by EK, EY, QR and even Jet on London to Bombay and Delhi. Intra Gulf by the likes of Arabia and Jazeera and soon carriers like Jet and Kingfisher will be flying to the Gulf. Maybe they should concentrate more on the Saudi market if they can get more access of course.
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Just a few questions chaps.
a) Who in heavens name is Bjorn Naef?
b) Has Hammeed Ali been shown the door?
c) Does too much Guinness turn your $hite black?
Any answeres to these vital questions would be much appreciated.
Cheers
Capt Fluffies
a) Who in heavens name is Bjorn Naef?
b) Has Hammeed Ali been shown the door?
c) Does too much Guinness turn your $hite black?
Any answeres to these vital questions would be much appreciated.
Cheers
Capt Fluffies
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I can understand your concern Bombay HF, but for some reason I am not.
For someone like myself as a low-level organism in the heirarchy of the GF food chain, market share doesn't worry me much-- it is inevitable that GF's market share becomes less and less as other airlines in the region increase their fleet size and we do not. What concerns me more is profitability. High market share does not automatically go hand-in-hand with profitability, although it can. I am unconvinced that most of the competition in the region is profitable despite their market share.
Those airlines that persue market share rather than profitability (read that to also mean sustainability) are in the end only hurting their stakeholders. Over the course of less than 100-years, the history of the airline industry is littered with the wreckage of airlines that miscalculated this and other factors. Similarly, governments and airline unions have largely failed to grasp the worldwide trends in aviation.
Simply opening new, unserved markets will do nothing long term if an airline cannot address it's basic deficiencies (after all, if money is to be made on a new route, others will follow also). Hopefully Mr. Dose will be successful in addressing these deficiencies.
For someone like myself as a low-level organism in the heirarchy of the GF food chain, market share doesn't worry me much-- it is inevitable that GF's market share becomes less and less as other airlines in the region increase their fleet size and we do not. What concerns me more is profitability. High market share does not automatically go hand-in-hand with profitability, although it can. I am unconvinced that most of the competition in the region is profitable despite their market share.
Those airlines that persue market share rather than profitability (read that to also mean sustainability) are in the end only hurting their stakeholders. Over the course of less than 100-years, the history of the airline industry is littered with the wreckage of airlines that miscalculated this and other factors. Similarly, governments and airline unions have largely failed to grasp the worldwide trends in aviation.
Simply opening new, unserved markets will do nothing long term if an airline cannot address it's basic deficiencies (after all, if money is to be made on a new route, others will follow also). Hopefully Mr. Dose will be successful in addressing these deficiencies.
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Agreed, but the problem i see is GF seem to be the only airline in this region that care about profitability. The rest seem happy to run at a loss as long as they can bring people to their countries to spend money in their economy ie EK. Maybe Bahrain should just accept the fact that GF will never be commercially viable and if they want an airline it will have to be subsidised by the Government.
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Bombay HF
You got it right !!
all the airlines do is bring people to these countries and there they spend
so the country makes money and subsidises the airline
its all in the same family
and in fact its good business because the country makes a profit
Bahrain hasn't even got a beach thats free for all
and its in the Gulf with nice warm waters
so the other Gulf Countries bring people to spend time hence money in their country
GF only transports the labour required to keep these other countries going
S.L.
You got it right !!
all the airlines do is bring people to these countries and there they spend
so the country makes money and subsidises the airline
its all in the same family
and in fact its good business because the country makes a profit
Bahrain hasn't even got a beach thats free for all
and its in the Gulf with nice warm waters
so the other Gulf Countries bring people to spend time hence money in their country
GF only transports the labour required to keep these other countries going
S.L.
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The question I ask myself, Bombay HF is whether Bahrain can afford it, and even if they do, whether it would be responsible for the Government of Bahrain to throw good money after bad into an unprofitable airline.
I don't know where you are from, but in my home country, people would be quite upset if Government wasted money on prestige projects that did not bring at least $1 return for each $1 spent. In many countries, Governments only subsidize airlines when it truly provides a good return, such as big tourist income, or because the cost of transport would be so high or unavailable that it is necessary to be able to make the country function. Bahrain is one of "poorest" countries in the region in terms of not having the size of petroleum reserves that it's neighbors did, and tourism potential, IMHO, is very limited. Even IF it did, would it be responsible governance to spend the wealth of these resources (all of which have a finite limit-- even in countries like Saudi Arabia or Qatar) on something that will give no meaningful returns-- I mean, should money be squandered on shiny jets for a big unprofitable airline, or would they be better spent on schools, hospitals, and development of emerging alternative industries with better promise? The resource wealth of a nation is also the inheritance of the future generations-- so the responsibilities are even greater-fold.
For that reason, I think it is a responsible approach being taken. Not everything has been tried yet, and IMHO, it is too early for the Bahrainis to "cry uncle" and write-off Gulf Air as a basket case. GF has potential if fixed properly-- plenty of examples of profitable airlines whose business has little to do with bringing pax or cargo to their home countries.
I don't know where you are from, but in my home country, people would be quite upset if Government wasted money on prestige projects that did not bring at least $1 return for each $1 spent. In many countries, Governments only subsidize airlines when it truly provides a good return, such as big tourist income, or because the cost of transport would be so high or unavailable that it is necessary to be able to make the country function. Bahrain is one of "poorest" countries in the region in terms of not having the size of petroleum reserves that it's neighbors did, and tourism potential, IMHO, is very limited. Even IF it did, would it be responsible governance to spend the wealth of these resources (all of which have a finite limit-- even in countries like Saudi Arabia or Qatar) on something that will give no meaningful returns-- I mean, should money be squandered on shiny jets for a big unprofitable airline, or would they be better spent on schools, hospitals, and development of emerging alternative industries with better promise? The resource wealth of a nation is also the inheritance of the future generations-- so the responsibilities are even greater-fold.
For that reason, I think it is a responsible approach being taken. Not everything has been tried yet, and IMHO, it is too early for the Bahrainis to "cry uncle" and write-off Gulf Air as a basket case. GF has potential if fixed properly-- plenty of examples of profitable airlines whose business has little to do with bringing pax or cargo to their home countries.
Last edited by Panama Jack; 10th Apr 2007 at 10:09.
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Gulf goes Swiss???
I am having a déjà-vu when reading all the new appointments in GF, not at good one, unfortunately:
Seems AD is bringing in all his old chaps that have failed with him in Crossair:
Bjoern Naef: ex- CRX Captain ( RJ?/ Saab340??), ex VP Product and Services after relaunch of Swiss Intl Airlines-->took his hat after 1,5 years having big difficulties in communicating with Cabin Crew Representatives and Unions. Was appointed CEO for Swiss Express a company that never flew( planned outsourcing of regîonal feeders for Swiss Air).
Did a quick Masters in the USA somewhere ( weekend course
??) and then had 2 choices: 1 great opportunity in Asia and one not so great in Africa. Guess which one he got??YES, Africa and he seemingly never liked it there. Marhaba in GF!! Recap: fail, fail, fail!!
Lee Shave: VP Sales and Marketing in the final years of Swissair. Was involved in the Sabena- Swissair deal, I believe ex BA guy, had a good reputation. Maybe a lucky shot for GF.
And AD goes on with his bulls***ing by saying "It is in our hands". Could anyone just cut his telephone line to Switzerland, to a guy named Moritz Suter giving him advice of how to screw up companies !!!
????
Seems AD is bringing in all his old chaps that have failed with him in Crossair:
Bjoern Naef: ex- CRX Captain ( RJ?/ Saab340??), ex VP Product and Services after relaunch of Swiss Intl Airlines-->took his hat after 1,5 years having big difficulties in communicating with Cabin Crew Representatives and Unions. Was appointed CEO for Swiss Express a company that never flew( planned outsourcing of regîonal feeders for Swiss Air).
Did a quick Masters in the USA somewhere ( weekend course
??) and then had 2 choices: 1 great opportunity in Asia and one not so great in Africa. Guess which one he got??YES, Africa and he seemingly never liked it there. Marhaba in GF!! Recap: fail, fail, fail!!Lee Shave: VP Sales and Marketing in the final years of Swissair. Was involved in the Sabena- Swissair deal, I believe ex BA guy, had a good reputation. Maybe a lucky shot for GF.
And AD goes on with his bulls***ing by saying "It is in our hands". Could anyone just cut his telephone line to Switzerland, to a guy named Moritz Suter giving him advice of how to screw up companies !!!
????
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PJ totally agree with you in most of everything you have said. Nobody can point the finger at GF as it is inevitible for them to downsize and the damage has been done a very long time ago. Yes they should have never allowed themselves to reach such a situation but they have and now they have to take drastic corrective actions.They have to start from scratch. They have to take a few steps back in order to move forward. The only major concern is the redunduncies which are to follow.
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Look out for the EY ad for Sky Chef's and Sky Nannies - you may think I am joking but JH does a very good copy-paste.
Back to GF, next week will be the official announcement on route cuts, but it will be in the papers tomorrow:
JNB/DUB/SIN/SYD/HKG/JKT/CCU
Back to GF, next week will be the official announcement on route cuts, but it will be in the papers tomorrow:
JNB/DUB/SIN/SYD/HKG/JKT/CCU
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It sadly sounds like a group of people who will very soon find themselves out of their depth. They have very limited experience in the type of oeration that GF is and even less dealing with the Arab way. The new VPO comes from Transafrik which is some turboprop operation and he is listed as having only 15 years experience including as pilot. Holy sh1t batman, to the batpole quick!!!!
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This brings up a few interesting points for the Boeing guys in particular.
First, if I understand it there won't be any pilot layoffs due to a general shortage already. That mean all the Boeing pilots are going to have to try and find a sidestick in some plastic tonka toy jet. Is GF going to try and makes us sign bonds for the bus now, cause from my perspective that just ain't happening for me. You can train me or fire me, but no way am i signing another bond at these pay levels. If they won't put me on the bus if i don't sign another bond does that invalidate the current bond that i have left on the boeing? If so that would seem to be a good deal leaving me free to go where i chose unbonded. I suppose the other option would be to leave the current bond in place for it's duration, just switch fleet types, that would make the most sense to me.
Second are they going to adjust the pay package? Seems unlikely to me given the cost cutting measures goin on. If not, do they expect to retain flight deck?, cause no one i know can afford to hang out here at these current pay levels no matter how much they like it here. It'll be an intersting summer, hopefully i can find enough reasons to stay.
First, if I understand it there won't be any pilot layoffs due to a general shortage already. That mean all the Boeing pilots are going to have to try and find a sidestick in some plastic tonka toy jet. Is GF going to try and makes us sign bonds for the bus now, cause from my perspective that just ain't happening for me. You can train me or fire me, but no way am i signing another bond at these pay levels. If they won't put me on the bus if i don't sign another bond does that invalidate the current bond that i have left on the boeing? If so that would seem to be a good deal leaving me free to go where i chose unbonded. I suppose the other option would be to leave the current bond in place for it's duration, just switch fleet types, that would make the most sense to me.
Second are they going to adjust the pay package? Seems unlikely to me given the cost cutting measures goin on. If not, do they expect to retain flight deck?, cause no one i know can afford to hang out here at these current pay levels no matter how much they like it here. It'll be an intersting summer, hopefully i can find enough reasons to stay.
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As a Boeing pilot be careful what you say right now. According to the official memo from yesterday GF is downsizing from 33 aircraft to 28 and will be an ALL airbus airline. There may be a rush of 76 guys to grab that sidestick so don't be left at the back of the Q.