Gulf Air To Stay True to Itself While Challenging Big Three

 - July 2, 2018, 12:00 PM
Gulf Air expects to take delivery of five Boeing 787-9s this year.

The new passenger terminal building at Bahrain International Airport, scheduled to open next year and expected to increase the gateway’s annual capacity to 14 million passengers from the current nine million, will support Gulf Air’s ambition to hold its own and compete with its much larger rivals in the Middle East, its chief executive said. “It will be the fastest connecting airport in the region,” the Bahrain national carrier’s CEO, Krešimir Kučko, told AIN on the sidelines of the ACI Europe & World general assembly while acknowledging traffic in the Middle East remains dominated by Dubai’s Emirates, Qatar Airways, and Abu Dhabi’s Etihad Airways. “It’s not just the super-connectors we ’re competing with, [it is] also low-cost carriers and other airlines from around the globe,” he explained. “In light of that, we undertook a 360-degree strategic review and developed a new corporate strategy.”

The five-year plan includes a refreshed branding, unveiled in early May, the incorporation of 39 new Airbus and Boeing aircraft—ten 787-9s, 12 A320neos, and 17 A321neos—and a network expansion to more than 60 destinations. “We are in a year of change,” Kučko noted. “We’re opening eight new routes in 2018 and are taking delivery of five 787-9s and two A320neos.” At the summer peak Gulf Air will operate 200 more weekly frequencies compared with last year. This year, the airline will launch mainly regional routes to re-establish and affirm its position in the Middle East while services to Asia Pacific, Europe, Africa, and maybe North America will follow in a next phase, he said.

Two 787-9s already arrived in Manama and now operate on a double-daily basis to London Heathrow. They feature Gulf Air’s new look 26 full-flat seats in business class and 256 seats in economy. The Airbus narrowbodies, powered by CFM International Leap-1A engines, have suffered a delivery delay of about 55 days, he said, and schedules now call for them to join Gulf Air’s fleet in August. “We did ask for compensation,” Kučko confirmed.

The new aircraft partially serve as replacements for Gulf Air’s six A330s, six A321s, and 16 A320s, and partially to support growth. “The strategic plan foresees a fleet of 50 aircraft in 2023, so we will definitely keep part of our current fleet, including some A330s. The A320 family aircraft are still young, on average 10 years,” Kučko said.

Gulf Air ordered the aircraft before the former Croatia Airlines CEO joined the Bahraini carrier, in November 2017, and the orders served as a basis for the new strategic plan. “We had a double mandate from the board: build a new strategy for the next five years and build a platform to incorporate the new fleet,” Kučko said. While the ultimate goal is to bring the airline to profitability, the main focus centers on enhancing Gulf Air’s role as a key national infrastructure asset that supports economic growth of the country, Kučko pointed out. He did not disclose any time targets for profitability and said only “eventually...either independently or in a group.” Gulf Air wants to build its MRO business, possibly to include third-party maintenance. Like its neighbors, the state fully owns the airline and the airport.

Gulf Air expects to carry 5.5 million passengers this year, up from 5.3 million in 2017, and its network will encompass 49 routes in 26 countries at year-end. Although management seeks to increase ancillary revenue, it plans to stay true to its full-service, national carrier model. “Gulf Air is particularly proud of its Arabian hospitality,” Kučko stressed, insisting the “national carrier [model] has a future.”

The five-year plan calls for an increase in cooperation with other airlines, including the possibility of joining an alliance. “We are evaluating the possibilities and will start the process of approaching the groups at the end of the summer,” he said.