Carrier says it will be business as usual for time being

Gulf Air believes the Abu Dhabi government’s withdrawal from its ownership structure will give the carrier greater freedom, although it has yet to assess the effect on its strategic operations.

Abu Dhabi’s government has decided to pull out of Gulf Air over a six-month period, leaving Bahrain and Oman as the only shareholders. It is unclear whether the two states will retain equal stakes in the carrier.

Gulf Air chief executive James Hogan says there will be little impact on the airline in the immediate future. “For the wide Gulf Air family – our customers, our staff and our suppliers – the key issue is how we are run. And that will be business as usual.”

Gulf Air says Abu Dhabi’s withdrawal, prompted by the government’s desire to focus on its own carrier, Etihad Airways – launched in late 2003 – has been a “scenario we’ve planned for” and the airline will not change its core approach. But it will review its operations over the coming months in the light of Abu Dhabi’s decision.

Gulf Air operates from three bases in the Middle East – Bahrain, Muscat and Abu Dhabi – and it is unclear whether the change in ownership will have any longer-term effect on this.

Two years ago Gulf Air revamped part of its Abu Dhabi operations into a lower-cost operation called Gulf Traveller, and transferred a number of its Boeing 767s to the new division.

A source close to the carrier says: “That will all be part of the next six months’ work and planning.” He adds that the airline’s basic objectives remain the same and it is not intending to curtail its fleet expansion plans. But he also points out that the reduced number of government stakeholders could simplify the decision-making process.

This could be particularly beneficial as Gulf Air presses ahead with plans to raise capital through possible privatisation.

Bahrain and Oman have restated their commitment to the airline. “I look forward to reporting to them on the further successful development of the airline in the future,” says Hogan.

“In the last three years we have made massive strides in our business performance. We’ve done that by focusing on our customers, on our staff and on our services. We will continue to do so.”

DAVID KAMINSKI-MORROW/LONDON

 

Pull-out was no surprise

Abu Dhabi’s withdrawal from Gulf Air is not unexpected. The emirate had been considering its position in Gulf Air for three years, along with the Qatari government, which also had part-ownership of the then-unprofitable carrier.
Qatar pulled out of its ownership role in May 2002 as its own flag carrier, Qatar Airways, underwent strong development. The three remaining states agreed to finance Gulf Air’s turnaround efforts with an $80 million capital injection.
Since then Abu Dhabi has created its own government-controlled carrier, Etihad Airways, a move seen as a possible precursor to a withdrawal from Gulf Air. Etihad Airways was set up towards the end of 2003 and has undergone rapid expansion.
Unlike those of Abu Dhabi and Qatar, the government of Oman has not developed its own long-haul carrier, opting instead to use flag carrier and partly privately owned Oman Air to focus on regional operations and developing its partnership with Gulf Air for long-haul services.

Source: Flight International

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