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Wed 24 Apr 2013 09:18 AM

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Bahrain's Gulf Air narrows losses by 50% in Q1

Loss-making airline has struggled amid costly fuel, political instability and increased competition

Bahrain's Gulf Air narrows losses by 50% in Q1
Gulf Air

Bahrain’s national carrier Gulf Air said it reduced its losses by 50 percent in the first quarter of the year following three months of restructuring at the struggling airline.

In a financial update published on Tuesday, the operator said the narrower losse was principally driven by a 21 percent reduction in costs compared to the year ago period. These included lower aircraft leasing fees, flight-related charges, employee expenses and the closure of some routes.

Gulf Air said it passenger yield in the three-month period was 21 percent better than the year before, while its “top-line revenue performance [was] better than planned”. The airline has slashed a number of loss-making routes and focused more on point-to-point traffic, the statement added.

The Bahraini government-owned carrier, which once had the biggest network in the Gulf, in October received a $500m bailout from the Gulf state’s authorities.

Gulf Air has struggled amid rising fuel costs, political instability in Bahrain and increased competition from other carriers in the region.

As part of its strategy to return to profitability, it has chopped down its number of routes to fewer than 40, pared back orders of new aircraft and reduced its workforce.

The airline also removed former Royal Jordanian boss Samer Majali as its CEO last year and replaced two boards of directors.

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