Bahrain’s loss making national carrier Gulf Air is open to merging with another airline, and will consider job cuts in a bid for profitability, new CEO Samer Majali said on Tuesday.
Senior executives of the company, which currently loses between $700,000 and $1m a day, were overhauling strategy in the hope of finding a niche in which to thrive, he added.
“Gulf Air has never really had the chance to rethink its role, and whether or not it should be looking for a niche. And so this is the process that we are thinking about now. That is the essential thing; to find a niche for the airline,” he told Arabian Business.
“A niche in which we can play a leadership position, rather than being a follower on all of the route segments that we compete on with everyone else. That’s essential to the way we move forward.”
Gulf Air is still to take delivery of an order of 15 Airbus A320s, 20 A330-300s and 24 Boeing 787 Dreamliners.
Asked if part of the rehaul of the company might see this order adjusted, Majali said: “It could, yes.” He would not specify whether the order would be increased or decreased.
On the subject of job cuts, Majali, who has been in his job for one month, said he was prepared to make them if the findings of the strategy review made them necessary.
He said: “Yes [I am prepared to make them]. But there are many different ways of making job cuts. One of them is firing people. Another is not employing new people, or allowing contracts to lapse. Or there are voluntary redundancies.
“If you go in with a hatchet and you fire a thousand people, that does nothing for the company. It creates bad morale and bad feeling and so on.
“You do reduce the staff, but you do it in a manageable format, in a manageable fashion, working with the people, working with the staff, working with the union. You do all kind of packages and so on and you gradually reduce the level to the level that you need.”
He added he was keen to retain industrious Bahrainis who work for the airline.
Majali, formerly CEO of Royal Jordanian, is Gulf Air’s fourth CEO in three years. The company, once the leading Gulf carrier, has struggled in recent years to compete with ambitious rivals such as Emirates, Etihad, Qatar Airways and Air Arabia.
“The main target now is not to make a loss…How long will that take? Well, five years is too long, one year is too short. Can we stop making a loss in three years? I don’t know. That would be making promises that I don’t know if I can keep,” Majali said.
Asked about rumours of Gulf Air merging with another carrier in the region, Majali said: “Target one is to get the airline of a solid commercial footing and to improve the quality of our service so Gulf Air is a very good carrier.
“That has to be done first, but if this could be supported by getting into stronger code shares or even alliances, or potentially a strategic partnership with another airline, that is something we are looking at. You need a like-minded airline. It has to make commercial sense.”
The full interview with Majali will be printed in Arabian Business magazine, out on Sunday.
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