The Björn ultimatum

These are uncertain times for Gulf Air CEO Björn Näf. But despite the carrier still failing to break even and Bahrain's own MPs baying for his blood, Näf is determined to finish what he started and see the airline rank among the top echelon of Gulf carriers.

Even in the cool surroundings of his air-conditioned office, Gulf Air boss Björn Näf is feeling the heat. When the Swiss took over as CEO of Bahrain's national carrier in July 2007, the airline was reportedly haemorrhaging upwards of $1m a day. Two years later and Näf stands accused of only exacerbating the carrier's problems.

Bahrain's parliamentary financial and economic affairs committee (FEAC) has questioned Näf's qualifications and experience, calling for Bahrainis to replace him and four senior expatriate executives. In February, the chairman of the FEAC called Näf "wrong for the post" and argued that money was being "wasted" on his wages.

Yet Näf is by no means the first to face fire as the boss of Gulf Air. Back in 2007 his predecessor Andre Dosé resigned four months after moving into the hot seat. Two years on, the reason for Dosé's departure is still unknown, although it is believed he took exception when the board questioned his management team's credentials.

Taking the helm, initially as acting president and CEO before securing the role full-time, Näf must have at least counted on government support. Today, however, that assurance would seem to have evaporated. Dressed in a black suit, white shirt and metallic tie, Näf shifts uncomfortably in his seat when quizzed about the criticism.

"I am reporting to the board and I'm responsible for what we have and haven't accomplished," he says, after a lengthy pause. "So far, the board has given me and the management team the assurance and confidence they are happy with the progress we have made and where the airline is heading.

"I have to report to the chairman and I have a very good relationship with him, so I know where I stand and that gives me the confidence to read the papers and not get worried about what's written," he continues. "If there is something, I can always call the chairman [Talal Al Zain] and say, ‘have you seen this in the paper?' He then assures me everything's fine and says, ‘Björn, keep on marching'."

In another shot at his critics, Näf argues that the airline has made huge strides since his appointment. A restructuring programme was initiated in 2007 to reorganise the fleet, cut costs and routes, and reduce the 6000-strong workforce by 1000 staff. Since then, the airline claims it has increased load factors to nearly 80 percent - although the empty seats on the mid-afternoon flight that Arabian Business took from Manama to Dubai last month suggests otherwise.

The airline has also phased out its old Boeing 737s, increased the route network to 42 after introducing new destinations such as Shanghai and Hyderabad, and slashed non-fuel costs by 30 percent. Other developments Näf highlights include signing orders for 59 aircraft, comprising Boeing 787 Dreamliners and Airbus planes, establishing 85 percent punctuality on flights - "I would challenge any other airline on punctuality" - and announcing new or extended sports sponsorship deals.

Later this month, Gulf Air will be the proud sponsors of the Bahrain Formula 1 Grand Prix. And last July, the airline became shirt sponsors of English second-tier football club Queens Park Rangers (QPR) after agreeing a three-year deal for an undisclosed sum. Reports suggest Gulf Air paid $7m but Näf claims that figure is wide of the mark.

Part of the attraction of QPR, Näf insists, is that the club is owned by F1 supremos Bernie Ecclestone and Flavio Briatore, themselves no strangers to brand building.

"There was an opportunity coming up with Bernie and Flavio to support a team which wants to write history and be taken from where they are into the Premier League and we have the same story," Näf explains. "We want to be taken from a position where people have generally given up on Gulf Air to a point where they say, ‘Gulf Air is doing a good job'."

Like Gulf Air, QPR has underachieved over the last few years, although Näf believes both will be tackling the big boys in their respective industries soon enough. Whether he's right remains to be seen, but Näf says strengthening the airline's brand with strong sponsorship deals will help Gulf Air's cause.

In keeping with this aim, the airline has already extended its agreement with Formula One to sponsor the Bahrain Grand Prix for a further five years. "It is part of communicating Bahrain and the airline to the world," Näf says.

Moving from the raceway to the runway, Gulf Air has introduced a re-fleeting strategy to replace older planes with more fuel efficient aircraft. The carrier is leasing four Boeing 777s from Indian carrier Jet Airways and is expecting a further nine aircraft, including A320s and A330s, to arrive this year. Meanwhile, 11 planes operating in Gulf Air's fleet will be retired to make way for the newer models.

Introducing new routes across Europe and the Middle East is also on the agenda. The airline, which recently increased frequencies to Frankfurt from nine to 11 weekly services, is specifically eyeing destinations in France, Germany, Russia and Asia. There is a note of caution, however. According to Näf, Gulf Air's board generally targets three route launches each year when times are good. But with storm clouds hanging over the industry, Gulf Air may play safe and stick with its 42 destinations in 2009.

Either way, the airline will extend existing routes by ramping up its Kuala Lumpur and Tehran flights to dailies, and its Manila service to 12 weekly this summer. In addition, Gulf Air will introduce double daily flights to Bangkok and Kathmandu from Bahrain.

Elsewhere Näf and his management team will continue looking for ways to reduce costs and fine-tune the airline in the coming months. A headcount freeze has been implemented to ensure employee numbers do not exceed 5,000.

In 2007, Gulf Air cut its staff by 1,000 to its current figure after implementing a voluntary redundancy scheme. Further cuts may be carried out, although no definite decision has been made.

Candidly, Näf admits the airline cannot compete with some other carriers in terms of size, fleet and destinations. He is, however, confident that Gulf Air's ‘10-30-15' strategy will bridge the gap. The concept involves building the Middle East's fastest transfer hub by ensuring people pass through check-in within 10 minutes. Meanwhile, people arriving in Manama will get through customs and security to baggage pick up in 15 minutes, and connection times will be within 30 minutes.

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