By Shane McGinley
Airline main sponsor of event, Gulf state set to lose $700m in revenues if F1 race is not rescheduled
Gulf Air, Bahrain’s flag carrier, will offer a full refund to travellers who had booked flights to attend the now-cancelled Grand Prix on March 13, the company said Sunday.
“We are refunding tickets booked for F1 for individuals and groups,” a spokesperson for Gulf Air told Arabian Business.
The airline is the main sponsor of the showpiece Formula One race, which was scrapped last week following violent clashes that left seven dead and hundreds injured.
Bahrain stands to lose at least $700m in tourism revenues, sponsorship and ticket sales if the event is cancelled indefinitely. The season-opening race boasts one of the world’s biggest television audiences, attracting around 527 million people each year.
Its cancellation is also likely to take a toll on Gulf Air’s pledge to break even by 2012, after several years of losses.
“Hopefully we’ll get [into profit] or be very close to it,” CEO Samer Majali said in an interview in Manama in October last year. The carrier was “on track” to break even by 2012, he said at the time.
Gulf Air has been restructuring its business since 2002 in an attempt to move into profit. Job reductions, route cuts and a focus on regional services were designed to save the airline $3bn over five years.
Gulf Air’s owner, sovereign wealth fund Bahrain Mumtalakat Holding Co, injected $1bn into the carrier in October to help it return to profitability.
A senior executive at the Gulf’s largest travel firm, Kanoo Travel, said last week that hotels, travel agents and tourism operators in Bahrain stand to lose millions of dollars if the race is not rescheduled.
Numbers were already down by 50 percent following widespread unrest in the Middle East, but a number of clients have retained their bookings in the hope the race will be rescheduled, said Sunil De Souza, regional travel manager for the UAE and Oman.
“Most of them we spoke to want to hold onto the booking for some time until probably a week until things become clearer. We are hoping [the protests] will subside and the race will continue at a later date and we will carry [the bookings] forward to a later date.”
Hotels are likely to be worst hit by the cancellation. The majority boast 100 percent occupancy over a race weekend.