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Gulf Air In Financial Difficulties?  
User currently offlineg2scandinavia From Norway, joined Jun 2010, 535 posts, RR: 1
Posted (2 years 5 months 1 week 6 days 9 hours ago) and read 9585 times:

Critical week regarding the future of Gulf air.

From THE NATIONAL:

The government of Bahrain and its biggest sovereign wealth fund are expected to announce within days whether it will close down, sell off or undertake a wholesale restructuring of the struggling carrier Gulf Air.

"Gulf Air has faced challenges in recent times, in common with other carriers around the world and combinations of unprecedented regional and economic factors have made business increasingly difficult," Gulf Air said.

"Given this, Gulf Air, its shareholder Mumtalakat and the government, both through the cabinet and parliament, are all working towards a common goal - to secure Gulf Air's long-term sustainability and to actively address the airline's loss-making position. A range of strategic options are currently under consideration."

They include downsizing Gulf Air or dissolving it, injecting more state funds into it, or even selling it off, according to the Bahraini newspaper Gulf Daily News.

"We expect that [this] week there will be some announcement," Samer Majali, the chief executive of Gulf Air told Bloomberg News.

http://www.thenational.ae/thenationa...ing-its-wings-clipped-after-review

29 replies: All unread, showing first 25:
 
User currently offlineaf022 From France, joined Dec 2003, 2147 posts, RR: 1
Reply 1, posted (2 years 5 months 1 week 6 days 5 hours ago) and read 9161 times:

No surprise GF is having such problems after all the terrible press from BAH.

I think regional airlines must be having problems because of unrest and political problems. How is RB, MS, and IY doing?


User currently offlinemigair54 From Spain, joined Jun 2007, 1624 posts, RR: 0
Reply 2, posted (2 years 5 months 1 week 6 days 5 hours ago) and read 9087 times:

I don´t think they will close down, but it´s logical that will all riots and bad press they have had a terrible months.


Restructuring with a downsize it´s the logical step... and selling to a foreigner investor is going to be difficult, first because i´m sure the gov would like to control somehow after selling and second because it´s not going to be easy interested in buying it with so much competence around....


User currently offlineFerminios From Canada, joined Apr 2011, 97 posts, RR: 0
Reply 3, posted (2 years 5 months 1 week 6 days 5 hours ago) and read 9008 times:

GF has been in financial trouble like, forever. They are far deeper rooted than the recent unrest in the ME. Basically they have been trying to restructure of the past 10 years and Bahrain is now stuck with their debt after Qatar, the UAE and Oman all jumped ship to develop their own national carrier.

I doubt that they will shut down, the airline is like all other airlines a symbol of pride. I will write a more extensive in-depth piece if I have time  


User currently offlinejfk777 From United States of America, joined Aug 2006, 8249 posts, RR: 7
Reply 4, posted (2 years 5 months 1 week 6 days 4 hours ago) and read 8884 times:
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Gulf Air was the Middle East before Emirates and Qatar Airways, it would be very sad for this airline to become history. I just loves the photos of those Gulf Air L-1011's. I hope they find a home and function perhaps like Oman Air.

User currently offlinepnd100 From Canada, joined Mar 2009, 343 posts, RR: 0
Reply 5, posted (2 years 5 months 1 week 6 days 4 hours ago) and read 8787 times:

Quoting jfk777 (Reply 4):
Gulf Air was the Middle East before Emirates and Qatar Airways, it would be very sad for this airline to become history.

This is very true. Gulf Air was the pioneer of airlines in this region & the forerunner to the Middle Eastern giants of today. Bahrain was long THE destination in the Gulf & it is really sad to see it come to this. What do you all think of GF being bought by a foreign carrier? Is it attractive? Will the Bahraini government go for it & can this turn the airline around?


User currently offlineCPHFF From Sweden, joined Aug 2011, 139 posts, RR: 0
Reply 6, posted (2 years 5 months 1 week 6 days 2 hours ago) and read 8540 times:

It makes me wonder if the "articles" in the magazine Airliners World are actually paid adverts.......... Just last year, there was a story on how successfult Gulf Air is/was. Same goes for Kingfisher. 4-5 Months after the "articles", both Airlines report financial difficulties........


Detroit is bankrupt. Don't forget to thank UAW folks!
User currently offlinepnd100 From Canada, joined Mar 2009, 343 posts, RR: 0
Reply 7, posted (2 years 5 months 1 week 6 days 2 hours ago) and read 8461 times:

Quoting CPHFF (Reply 6):
It makes me wonder if the "articles" in the magazine Airliners World are actually paid adverts.......... Just last year, there was a story on how successfult Gulf Air is/was. Same goes for Kingfisher. 4-5 Months after the "articles", both Airlines report financial difficulties........

There is some truth to what you are saying but on the other hand it may just be circumstance. The publication reports an airlines' past successes & future plans. They do not provide necessary an accurate financial picture of the present. Furthermore, since that article there has been much upheaval in Bahrain specifically & the region as a whole.


User currently offlineEmiratesCPH From Denmark, joined Feb 2006, 88 posts, RR: 0
Reply 8, posted (2 years 5 months 6 days 14 hours ago) and read 7337 times:

Just wundering, could EK, QR or EY be interested to buy GF?

I know it is the other way around, as all above started as their respectively governments left GF/BAH..

Any ideas?



Fly Emirates
User currently offlineQatarA340 From Qatar, joined May 2006, 1797 posts, RR: 6
Reply 9, posted (2 years 5 months 6 days 13 hours ago) and read 7181 times:

Quoting EmiratesCPH (Reply 8):
Just wundering, could EK, QR or EY be interested to buy GF?
Quoting EmiratesCPH (Reply 8):

Qatar left GF in order to start QR. The reason Qatar withdrew was that GF's was very poorly structure routewise, organization wise, and was engulfed in overspending and overpricing and corruption. That is still the case today.



لا اله الا الله محمد رسول الله
User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 10, posted (2 years 5 months 6 days 11 hours ago) and read 6979 times:

Quoting QatarA340 (Reply 9):
Qatar left GF in order to start QR. The reason Qatar withdrew was that GF's was very poorly structure routewise, organization wise, and was engulfed in overspending and overpricing and corruption. That is still the case today.

While that may be true, I think it's fair to say that the financial details relating to GF, QR, EK, and EY are murky at best. They are not businesses in the traditional sense, but serve national policies.



Nostalgia isn't what it used to be.
User currently offlineMillwallSean From Singapore, joined Apr 2008, 1234 posts, RR: 6
Reply 11, posted (2 years 5 months 6 days 11 hours ago) and read 6864 times:

Its not easy to live on connecting passengers when your hub is Manama and the neighbours are Dubai, Abu Dhabi and Doha. Ok Doha isnt a big wow but it sure beats Manama.
Also there was a time when Bahrain was the financial - banking centre of the wider Arabian pensinsula.

Whats left for Bahrain today?
OD to Bahrain, the foreign military installations (there as long as the minority sunni are allowed to rule the country and the majority shias are kept from power). Small banking presence (Running like Ben Johnsons to Dubai)
Add on that Gulfair doesnt connect to many destinations and dont have the pricing power, brand recognition or scale that its neighbours airlines have.
One big uphill...
One big money pit.

Best they can do is turn the airline into an narrowbody carrier serving the gulf plus labour and migrant worker focused routes within 4 hours from Manama.
Forget unprofitable Asian and European routes. Even dump London. Forget fancy widebodies. Cancel all such orders. Im sure many planes they have on order are so delayed they can walk away relatively unscratched.
Nah a fleet of A320 doing three or four legs per day and be done with it. Thats all Manama needs and it will save the people of Bahrain a lot of money.



No One Likes Us - We Dont Care.
User currently offlineIndianicWorld From Australia, joined Jun 2001, 2878 posts, RR: 0
Reply 12, posted (2 years 5 months 6 days 11 hours ago) and read 6823 times:

GF is in a constant state of restructure, with new visions and plans to turn things around. Might as well just merge with Bahrain air and become a LCC, or be a smaller premium brand of the group. There's not many options left.

User currently offlineklwright69 From Saudi Arabia, joined Jan 2000, 2010 posts, RR: 3
Reply 13, posted (2 years 5 months 6 days 10 hours ago) and read 6795 times:

It is no surprise Gulf Air is having problems. The entire Persian Gulf region is very, very well served in terms of passenger air service. Not only is there EY, EK, and QR. But there is also Air Arabia, Jazeera, and Fly Dubai and others. The competition is completely insane in this part of the world.

This before we factor in the problems in Bahrain.


User currently offlineIndianicWorld From Australia, joined Jun 2001, 2878 posts, RR: 0
Reply 14, posted (2 years 5 months 6 days 10 hours ago) and read 6774 times:

^^ Very true. The competition is intense.

Hard to see where they can fit into the picture.


User currently offlineSurfandSnow From United States of America, joined Jan 2009, 2832 posts, RR: 30
Reply 15, posted (2 years 5 months 6 days 10 hours ago) and read 6729 times:

GF's troubles have little to do with the recent political and social unrest in their home market of Bahrain. They had it extremely easy for decades, with generous financial support from four petrodollar states (Bahrain, Qatar, Abu Dhabi, and Oman) up until the 2000s. In fact, they pioneered the way for prestigious Gulf carriers to serve the likes of the U.S. and Australia. BAH (along with DOH, AUH, and MCT) were always major international transit hubs rather than key O&D destinations in their own right.

But the good times don't last forever, and GF has had a rough go of things in the past decade. First there was the shock of 9/11. This affected GF like everyone else, with increased security costs and decreased demand. Then there were the wars in Afghanistan and Iraq, which destabilized many markets in GF's backyard. As that happened, they faced three longtime partners not only abandoning the airline but using the very funds that once went to GF to start competing airlines that were not expected to be profitable. This left Bahrain - a country that had all but exhausted its oil reserves - to assume control of the whole airline. Not only did GF suddenly have to compete with new state flag carriers, but also the rise of Middle Eastern LCCs. When I lived in Bahrain in 2008, all of the locals told me how much they liked 2B (Bahrain Air) for its low fares and nice new planes, while they disliked GF. The end of the 2000s saw the onset of the global recession, further eroding demand for a region that was already suffering from significant overcapacity. So, while the Arab Spring gave Bahrain plenty of bad press, that caused about as much damage as the political unrest in Thailand did to TG. Except the latter case actually saw the hub airport closed - operations at BAH were never affected during the protests as far as I know.

I thought GF had found its niche, jumping into high-yielding niche markets like Iraq and Afghanistan before competitors and dropping loss-making prestige routes like SYD in favor of focusing on a regional strategy. But if the airline is still posting major losses, maybe its time for Bahrain to pull the plug and focus on attracting more foreign carriers (UA seems to be doing well) and growing 2B.



Flying in the middle seat of coach is much better than not flying at all!
User currently offlinedirectorguy From Egypt, joined Jul 2008, 1649 posts, RR: 11
Reply 16, posted (2 years 5 months 6 days 4 hours ago) and read 6342 times:

Dump the A340s.
Get rid of the A330s.
Focus on O&D to KWI/DOH/AUH/DXB/MCT/AMM/BEY/CAI/HBE plus Saudi Arabia/India/Iraq/Iran using A320s and EMBs. Merge 2B and GF together. Bahrain can't afford the luxury of two airlines.
Focus on BAH's O&D market.
The only bright spot could be a link-up with oneworld. LHR is possibly the only viable longhaul destination. Connect LHR with smaller markets on the Indian subcontinent that aren't served nonstop from LHR. Even that is risky, since it's always possible that EK or TK will undercut them on price.


User currently offlinereadytotaxi From United Kingdom, joined Dec 2006, 3151 posts, RR: 2
Reply 17, posted (2 years 5 months 6 days 3 hours ago) and read 6172 times:

Quoting connies4ever (Reply 10):
They are not businesses in the traditional sense, but serve national policies.

Keen observation.  



you don't get a second chance to make a first impression!
User currently offlineWY101 From Oman, joined Feb 2012, 50 posts, RR: 0
Reply 18, posted (2 years 4 months 3 weeks 2 days 8 hours ago) and read 5039 times:

Quoting QatarA340 (Reply 9):
Qatar left GF in order to start QR. The reason Qatar withdrew was that GF's was very poorly structure routewise, organization wise, and was engulfed in overspending and overpricing and corruption. That is still the case today.

Did QR ever post profits??
Its really sad seeing GF downsizing as I thought they were finally getting their act together. I hope they get back on track quickly

[Edited 2012-02-19 07:28:51]

User currently offlineLuftyMatt From United Kingdom, joined Jan 2009, 428 posts, RR: 0
Reply 19, posted (2 years 4 months 3 weeks 2 days 7 hours ago) and read 4973 times:

Quoting WY101 (Reply 18):
Did QR or EY ever post profits??

I think EY has, quite recently.



chase the sun
User currently offlineWY101 From Oman, joined Feb 2012, 50 posts, RR: 0
Reply 20, posted (2 years 4 months 3 weeks 2 days 7 hours ago) and read 4939 times:

Quoting LuftyMatt (Reply 19):
I think EY has, quite recently.

Yeah just checked it now EY posted profits for the first time in 8 years.

[Edited 2012-02-19 07:47:03]

User currently offlineWY101 From Oman, joined Feb 2012, 50 posts, RR: 0
Reply 21, posted (2 years 4 months 3 weeks 2 days 2 hours ago) and read 4601 times:

Quoting connies4ever (Reply 10):
While that may be true, I think it's fair to say that the financial details relating to GF, QR, EK, and EY are murky at best. They are not businesses in the traditional sense, but serve national policies.

I totally agree with you. These airlines only serve national policies and they can keep flying at loss because of the oil revenues. But how long can they survive?!!


User currently offlinePe@rson From United Kingdom, joined Jan 2001, 19186 posts, RR: 52
Reply 22, posted (2 years 4 months 3 weeks 2 days 2 hours ago) and read 4572 times:

Quoting WY101 (Reply 21):
Quoting connies4ever (Reply 10):
While that may be true, I think it's fair to say that the financial details relating to GF, QR, EK, and EY are murky at best. They are not businesses in the traditional sense, but serve national policies.


I totally agree with you. These airlines only serve national policies and they can keep flying at loss because of the oil revenues. But how long can they survive?!!

I can't speak for the other airlines, but EK is very much for profit. Indeed, here are its financial results between 2006 and 2010 in USD and millions (2010 backwards to 2006):

Net result 1,462.89 963.31 186.78 1,367.54 843.14
Net margin 9.87 % 8.14 % 1.58 % 12.93 % 10.61 %

But you'll disregard this, so believe whatever you want.



"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
User currently offlineWY101 From Oman, joined Feb 2012, 50 posts, RR: 0
Reply 23, posted (2 years 4 months 3 weeks 2 days 2 hours ago) and read 4537 times:

Quoting Pe@rson (Reply 22):
I can't speak for the other airlines, but EK is very much for profit. Indeed, here are its financial results between 2006 and 2010 in USD and millions (2010 backwards to 2006):

Net result 1,462.89 963.31 186.78 1,367.54 843.14
Net margin 9.87 % 8.14 % 1.58 % 12.93 % 10.61 %

But you'll disregard this, so believe whatever you want.

Believe me I've been on QR, EY and EK and they were running ghost flights. QR is running many of its routes with losses, and what amazes me is that they keep increasing capacity and you end up with an empty flight. I was on the Melbourne route recently with QR in J and there was only 6pax in J and about 70 in Y.


User currently offlineIndianicWorld From Australia, joined Jun 2001, 2878 posts, RR: 0
Reply 24, posted (2 years 4 months 3 weeks 1 day 10 hours ago) and read 4113 times:

^^ Seems mire the exception than the common occurrence on the MEL route these days. Their LF% is much more healthy than it was.

It's hard to judge anything off one flight. I have been on numerous flights with carriers with fairly empty cabins but the overall route performance is strong.

Overall though, yields and performance on a few routes will likely be less than ideal.


25 WY101 : So when routes are running at losses airlines suspend these routes. I think that the aviation industry was better in 1990s with fair competition.
26 YTZ : If this is the case (and I don't believe it is), how this is a bad thing for me as a consumer? If the government of Dubai wants to blow its oil wealt
27 YTZ : The best thing for Bahrain, IMHO, is to ditch Gulf Air and offer to become a hub for all the non-Gulf carriers. IE. Become a virtual hub for AI, LH, B
28 United787 : My wife is about to book some regional flights on GF for travel within the next month, is that a bad idea?
29 WY101 : Actually GF regional fleet is pretty new. All of their E170,E190, A320 fleet are less than three years old and they have been getting good reviews on
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