Chuck Grieve MANAMA, BAHRAIN
Bringing a fresh management style to Gulf Air, new chief executive, Ibrahim Al Hamer prepares to face the myriad challenges confronting the carrier.
Ibrahim Al Hamer is nothing if not focused. At 49, and with notable career achievements in banking and civil aviation already under his belt, if Gulf Air's new president and chief executive says he is going to instill new vigour, pride and profitability into his airline, he means it.
This is a man who decided at 43 to follow his dream of becoming an airline pilot and has managed it, along with undertaking his full workload as head of Bahrain's Civil Aviation Affairs (CAA) department and being a member of several other company boards, including Gulf Air's. On 1 January, after taking over the reins at Gulf Air - succeeding Dr Ahmed bin Saif Al Nahyan, who held the post for five years - he immediately set about making his mark.
Nobody, least of all Al Hamer himself, expects it to be easy to buttress the fortunes of an airline that in recent years has often been in the news for the wrong reasons. "Our top priority is to set our house in order," he says. "Our ultimate objective, after passing through the period of consolidation, is to try and get premium passengers back on our aircraft, because that's where the business, the image and the profit is."
Open door
One of his first major tests has been to handle the aftermath of the crash last August that killed all 143 passengers and crew aboard an Airbus A320 as it tried to land at Bahrain International Airport. The CAA delivered its technical report at the start of April. It concluded that although Gulf Air had already moved to address safety oversight issues in 1999, it had not had time to show results by August. Whatever the final conclusions, Al Hamer is clear that it is proper that all the facts should be known.
Transparency - along with teamwork and co-operation - are words Al Hamer uses often to describe his approach to management. None of the three is exactly a core value typically associated with Middle East carriers, but he is adamant: they represent the way forward for Gulf Air.
"We have adopted an open-door policy," he says. "People are communicating with me directly, especially through e-mail. I receive plenty of comments and remarks, and they're all valuable. Already the theme we have adopted - 'winning together' - is working."
As for co-operation, Al Hamer believes that Arabian Gulf carriers must look to common interests to compete effectively, especially against the alliances. This may be easier said than done, although within weeks of taking over he had signed a codeshare agreement with Oman Air and had met with Emirates to discuss areas of mutual interest.
Gulf Air which turned 50 last year - has never been an easy company to manage, and the four photos on the wall behind Al Hamer's desk are telling. They are of the rulers of Abu Dhabi, Bahrain, Oman and Qatar, the joint owners of the airline. Gulf Air flies as the national carrier of each state and maintains hubs at four international airports. Two owners, however, have their own airlines as well - Oman Air and Qatar Airways. The latter recently caused a ripple of interest with its orders for the Airbus A380. Persistent rumours since the airline's financial restructuring in the mid-1990s that one or another of the partners plans to withdraw from Gulf Air have so far amounted to nothing.
Nevertheless, Al Hamer takes little for granted. His owners "have their own requirements, their own plans" which he accepts "may not necessarily be the same". It will be a formidable task to serve local interests as well as fulfill international standards and expectations. Yet Al Hamer appears to have been exceptionally well prepared for it.
Bahrain-born and a high flier in the civil service of this tiny Arabian Gulf island-state for nearly three decades, he rose to become under-secretary for Civil Aviation Affairs in 1991. Along the way he gained experience through a number of postings within the ministries of transport, finance and national economy, where he chaired the executive committee of the Bank of Bahrain and Kuwait during its restructuring. In nine years at the helm of the CAA, he oversaw significant development at the airport, including volume growth of 15% in his last year. He also served for 11 years on the board of Gulf Air, with several years as a member and chairman of its executive committee.
Experience in the board room as well as on the flight deck helped him get off to a running start when he took over. His first priority was to assemble a strong senior management team. Joining Gulf Air with Al Hamer in January were Abdul Hakim Al Mutawa as assistant vice president business policy development, and Neil Warringer as assistant vice president corporate affairs/president's office. For Warringer, ex-British Airways and British Caledonian, it was a move across the road with his boss from the Bahrain CAA.
In February, Adel Abdullah Ali joined as vice president commercial and Customer services, while Capt Peter Weiss changed from consultant to staff as vice president for operations. Ali brings more than 22 years of experience with BA, latterly as director-general for the Middle East and North Africa. Weiss, whose expertise covers operations, quality assurance and flight safety, had been working for the previous year with Gulf Air in the role of Lufthansa Consulting's project manager in charge of restructuring airlines.
"When you come to a new organisation, you go through the phase of learning to become acquainted with what's going on and get your priorities right," says Al Hamer. "Most important is to have your team. I am most fortunate to have them all on board now."
He has never been one to shrink from competition but is equally interested in co-operation, particularly with other Gulf carriers. "I believe there is enough business in the region for all of us, as long as we don't go into cut-throat pricing - that would bring great harm on everybody," he says.
"Unless we work together and share the cake - which is becoming smaller and smaller - then certainly it will be at the expense of one of us. Our philosophy is to work with [the other Gulf airlines] in all aspects of common interest," he adds.
Co-operation
Al Hamer sees greater commercial threats from outside the immediate region, where strong airlines are getting bigger and smaller ones "are unfortunately getting weaker". Co-operation is his antidote, so medium airlines such as Gulf Air, with its smaller competitors within the region, can grow in size and strength: "That's how I see it. If each one of us ran our own agenda, then we would be categorised as the smaller ones, getting weaker. I don't think that's right. That's why we have no choice but to get together."
With a fleet of 32 aircraft, including Airbus A340/330s and A320s, and Boeing 767 types, serving close to 60 destinations, Gulf Air remains one of the region's largest carriers. The average age of its aircraft is 69 months. Since the restructuring, it has also returned to modest profitability. However, the carrier has been badly affected in the last year by high fuel prices and currency fluctuations. Management is not expecting miracles when the books close on the financial year at the end of March. Load factors in economy class remain strong, as does cargo - another 11% year-on-year gain is expected - but premium passengers have not been attracted to Gulf Air. Al Hamer admits there has been some decline in first and business classes which he is keen to address; redesigning the product by this summer is one of Ali's priorities.
Another challenge is to reach the industry standard 85% for on-time departures from the current tally which is "in the 60s". However, Al Hamer adds that performance is already above 80% for departures within 15 minutes. He intends to address issues that affect performance such as "workable and realistic" schedules and staffing. Actual programmes are still being worked on, but he says that passengers will start to see improvements before the summer.
Growth Limits
One concern he voices is that of the impact of size on competition and service. With the large airlines growing by acquisition or alliances, the smaller carriers risk being swallowed up or forced out of business.
At the other end of the scale, there is a limit to growth, he says, and when the biggest airlines reach a stage where they cannot grow any more because they have acquired or made alliances with the ones available, there will be another war between the alliances.
"That's why it's right for the smaller airlines to try to work among themselves by way of opening markets, complementing their services," he says. "Otherwise, if they are swallowed by bigger companies, they won't have any control over their own affairs. Big ones dictate the policy. Not only will the airlines suffer, but the customers and the countries where they belong will too."
World Trade Organisation compliance will open up Middle East service sectors, and the aviation business, as one of the main ingredients, will be a target. Says Al Hamer: "I am for competition, for being liberal and being open. But I'm talking about the way the bigger airlines swallow the smaller ones. You end up with passengers and airports not having much choice."
Meanwhile, Gulf Air's president intends to keep working his weekends as an A320 captain because, aside from the fact that he loves flying, "it keeps me close with the staff, passengers and operation". It can result in extraordinary public relations too, as was seen in a recent case where a passenger's comments, addressed to the chief executive, was handed directly to him by a flight attendant.
Such an attitude is a breath of fresh air and does not stop with first-class passengers. Employees talk of instant decisions and individual encouragement as their new head's "common-man" approach sinks in. For them, as for the customers Gulf Air hopes to win back, actions speak louder than words.
Source: Airline Business
