From Dubai-based Gulf News
's Business pages, Friday 20/12/02
Gulf Air's board reaffirmed its "full commitment" to the national carrier of Abu Dhabi, Bahrain and Oman and unanimously approved the debt-ridden airline's three year recovery plan, the company's president said yesterday.
As a result, more than 90 million dinars ($238 million) will be injected into the airline by the three partners for 2003 and government debt will be deferred until 2005, said James Hogan, Gulf Air president and chief executive.
"It is a clear statement by the three owner-states of their support for the national carrier. They gave us what we have asked for.
"The three-year strategic recovery plan was one of the most comprehensive plan ever constructed by the management of Gulf Air," Hogan said.
Gulf Air has suffered a string of losses over the past few years. According to Ahmed Al Ham-madi, vice-president, finance, the company is expected to announce a loss of around 42 million dinars for the year 2002. Last year, it lost 52.2 million dinars.
Hammadi said Gulf Air's debt totals $700 million in addition to the government's debt which he declined to reveal.
The board meeting here on Wednesday night, was headed by outgoing chairman, Sheikh Hamdan bin Mubarak Al Nahyan. Bahrain's Finance Minister Abdullah Saif has been designated as the new chairman.
Hogan said there were a number of 'pillars' to the recovery plan including brand development, fleet re-construction, network, alliances and customer service. "There will, of course, also be a strong focus on profitability and improvements to cost structures," he noted.
The airline is expected to 'break even' in 2004 and will return to the black a year later.
Hogan said work had started to implement the plan. Talks are under way with Boeing, Airbus, Embraer and Bombardier to discuss Gulf Air's requirements for the next ten years. "As we grow, we will naturally also expand our fleet. We aim to return to destinations previously served and introduce new ones - all on a commercial basis."
He also announced that Gulf Air is talking to a number of leading alliances including Star and Oneworld. A decision about joining one of these could be taken in the first half of 2003, he said.
Dr Haidar Majali, head of legal affairs, said as of December 10, Qatar had ceased to be a part of the company. Qatar had announced last July its decision to pull out. Gulf Air is still looking into the legal and financial impact of the Qatari withdrawal, Majali said, adding that a final report will be submitted to the board in May.
Qatar's shares will be divided among the remaining three-owner states, Hogan said. He did not rule out inviting private investors into the company but this would only be after the completion of the turnaround plan.
RJ's in the Middle East? Bring 'em on!
But seriously, it's good to hear such news from an airline that I--until about 1991-- thought was the only airline based in the Middle East! I'm not saying it's the best of airlines (I've had some pretty bad experiences on it), but It's AUH's biggest operator and I'd hate to see something bad happen to it.
Your attention, please.