By Elizabeth Broomhall
CEO of Gulf state carrier says it is "no secret" both airlines hurting after 30% drop in sales
The CEO of Bahrain Air has said he would be open to a merger with state-backed Gulf Air in a bid to enhance the carriers’ network of flights and overall operational efficiency.
In an exclusive interview with Arabian Business, the head of the privately-held carrier Richard Nuttall said there was an urgent need to solve the problems that both loss-making airlines face, and that a deal between the two carriers had a lot of support in the country.
“We are very open to merging with Gulf Air, and can see a number of synergies,” he said.
“It’s no secret that Gulf Air, Bahrain Air and most airlines in the region are hurting. If we come together we can rationalise and be that much more efficient with less cost. It is certainly an option we would be interested to pursue.”
A merger would also help both airlines expand their existing network of routes, he said, given the limited number of traffic rights available.
Ideal destinations for Bahrain Air in the future would be Egyptian capital Cairo and Pakistan, he said.
“In Bahrain with the limited traffic rights that we’ve got, it is difficult to build a network.
“While we have a game-plan going forward, at the same time we are open to talking to other carriers about formal mergers which might allow the two airlines to have a bigger network.”
Bahrain Air was originally launched as a low cost carrier in 2008, but has since changed its business model.
The four-year old company, which has consistently made a loss since commencing operations, saw revenues drop by 30 percent in 2011 as the implications of the Arab Spring heavily impacted the flow of air traffic.
Originally flying to 20 cities with a total six planes, the airline has since been forced to abandon its services to Egypt, Lebanon, Iran and Iraq, cutting the number of destinations to 12 and reducing its fleet to just four aircraft.
Nuttall said he expected revenues and the number of destinations to go up again this year, after the company acquired traffic rights to India and as the aviation market started to pick up.
Already in 2012, the airline has launched flights from Bahrain to Trivandrum in India, and is set to introduce services from Dammam in Saudi Arabia, to Sudan, and to Lebanon.
“We expect in 2012 to have the same revenues we had in 2010,” Nuttall added. “What has happened in Bahrain has put the airline back two years.
“We will also go back to another destination in the summer, but we are just making up our mind which one it will be. It will be Egypt or Bangladesh. But I think we will be back in Bangladesh by the end of the year.”
It is a great idea to merge with Gulf Air, so that, for example, passengers could travel from Trivandrum to London in one ticket. It will be a good idea to tap North America for Bahrain Air or Gulf Air by flying to Toronto non-stop from Bahrain and could use Air Canada or any other American airline to fly to New York, Houston, Dallas, Los Angeles, etc by not changing Terminals and by completing immigration formalities at the destination airport.