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A Sample Feature From Aviation News Gulf Air – reshaping the Golden FalconBeing the servant of more masters has never been an easy task for anyone, yet this has been the difficult duty of Gulf Air, the proud and historical carrier of the Arabian Gulf countries, whose long history, now in its 58th year, is today embarked on dramatic changes in a race for survival. Once the ambassador of Arab hospitality across most continents, and still celebrated as one of the finest service providers in the air, the airline is now facing a challenging new environment which will see it reshaped completely in the short term in an effort to return to profitability. Luigi Vallero looks at its past and the unfolding plans for its future.
Gulf Air’s Airbus A330-200s were originally delivered in the scheme seen below, beginning in June 1999, but to keep pace with competitor airlines, new colours were adopted in 2003. The same aircraft is seen above at London Heathrow in the present Golden Falcon livery. (Photos, Ian Schofield/Airbus). Below: Newly-appointed president and chief executive André Dosé, whose task is to bring Gulf Air back to profitability.
In 1951, BOAC became a major shareholder in Gulf Aviation, holding a 22% stake. Bahrain being an important stagingpost for the British carrier on its routes to the Far East and Australia, a close co-operation between the two airlines characterised those years, with BOAC providing expertise and aircraft as needed, culminating in the introduction of Vickers VC10 services between Bahrain and London in April 1970. The airline faced a milestone on January 1, 1974, when the governments of the Kingdom of Bahrain, State of Qatar, the Emirate of Abu Dhabi and the Sultanate of Oman purchased BOAC's shares in Gulf Aviation. Under the Foundation Treaty they had created the multi-national carrier of the four States, the airline’s name changing to Gulf Air. The fleet then comprised four VC10s and three BAC One-Elevens, plus a number of Fokker F27s used on local services. The famous Golden Falcon theme was introduced in 1976 when the airline received two brand new Lockheed L-1011 TriStars and five Boeing 737-200s, enabling it to quickly expand its reach to include Amman, Amsterdam, Athens, Baghdad, Bangkok, Beirut, Cairo, Colombo, Delhi, Dhaka, Hong Kong, Jeddah, Khartoum, Larnaca, Manila, Paris, Ras Al Khaimah and Sanaa. Two years later the luxuriously appointed ‘Five Star Golden Falcon’ TriStar fleet had doubled, replacing the elegant VC10s, while the number of 737s had increased to nine, enabling the airline to phase out the now ageing One-Elevens. Gulf Air joined IATA in 1981 and the following year had the distinction of becoming the first international airline authorised to fly to Riyadh, Saudi Arabia. In 1985 the airline counted 4,500 employees from 41 nationalities and two years later set up in Abu Dhabi its own heavy maintenance division, GAMCO (Gulf Air Maintenance Company). In 1988, already looking for a TriStar substitute, the airline introduced its first more fuel efficient Boeing 767-300ER, while new services to Frankfurt, Istanbul, Damascus, Dar Es-Salaam, Fujairah and Nairobi were launched, and flights to Shiraz and Baghdad resumed. Coming of age in 1990, with Gulf Air celebrating its 40th anniversary, a new Balenciaga-designed uniform was adopted, while network expansion further afield brought the Golden Falcon flying to Singapore, Sydney and Trivandrum, giving Gulf Air the distinction of becoming the first Arab airline to fly to Australia. Long-haul expansion continued in the ensuing years, with Johannesburg and Melbourne joining the network in 1992, followed by Casablanca, Entebbe, Jakarta, Madras, Rome, Sana’a, Zanzibar and Zürich in 1993. Below: The A330 in its Series 200 form has become the backbone of Gulf Air now that the Boeing 767s have been withdrawn from service in a cost-cutting measure. The fleet of six are registered A4O-KA to –KF. (Photo, Ian Schofield).
Marking a new and strong relationship with Airbus, Gulf Air received its first A340-300 in May 1994, and the airline began forging a number of commercial agreements with airlines worldwide, most notably with American Airlines and British Midland. Looking for new markets, in 1998 flights to Kathmandu, Nepal, were launched, followed by Islamabad, Lahore, and Peshawar in 1999. In that same year Gulf Air took delivery of its first two A330-200s, out of an order for six of the type, and a new Pierre Balmain-designed uniform was introduced. Airbus A320-200s had in the meantime started to gradually replace the 737s on the shorter routes. However, the market changed quickly at the end of the decade, and new competitors emerged to begin eroding Gulf Air’s position resulting in a drop in yields. Now 50-years-old and facing a very different environment, the airline launched a new short-lived service to Milan in 2000, while the remaining A330-200s entered service in June. That year closed with losses in the range of BD40m. With the company no longer profitable, James Hogan was appointed as President and CEO in May 2002, initiating a three-year restructuring and turnaround programme named Project Falcon. At the end of the year, one of the partners withdrew its support when the State of Qatar announced that in the future it would fully support its national carrier, Qatar Airways, created in 1994. Undeterred, in 2003 Gulf Air unveiled a new Landor-designed livery and launched Gulf Traveller, a 100% owned Abu Dhabi-based subsidiary, providing all-economy full service operations with a dedicated fleet of five Boeing 767-300ERs transferred from Gulf Air’s mainline operations. Flights to Zanzibar were resumed in June and Cochin was added to the network, while direct daily flights to Athens and Sydney were launched at the end of the year. Gulf Air also announced a sponsorship deal for the newly launched Bahrain Grand Prix, a deal which will last until 2010, while among the innovations was the launch of the SkyChefs programme, Gulf Air becoming the first Middle East airline to introduce in-flight chefs for its first class passengers, and Sky Nannies providing specialist child care on board long-haul flights. On the heels of the new plan, in 2004 the airline began direct flights in the lucrative corridor between Dubai and London, as well as between Muscat and London, and a daily service between Abu Dhabi and Ras al Khaimah. The carrier showed strong growth as the traffic figures at the end of the year rose to a record 7.1 million passengers. Project Falcon reduced losses and at the end of 2004 achieved a return to profitability. With the best financial performance since 1997 - a profit of BD1.5m ($4.0m) was recorded despite a BD30m ($80m) increase in fuel prices during the year, on revenues up 23.8% over the previous year – troubled times still lay ahead and a return to heavy losses was inevitable. The launching of Abu Dhabi-based Etihad and the withdrawal of the Emirates’ share in Gulf Air to fully support its own carrier on September 13, 2005, was a major blow. No longer in need of supporting a hub operation in Abu Dhabi, the Gulf carrier shut down its Gulf Traveller operations there from April 28, 2006, completely re-focusing its network around the two remaining hubs of Bahrain and Muscat, concentrating its departures at a ratio of respectively 75% and 25% at these two airports. Despite the withdrawal of hub operations from the capital of the UAE, the airline produced a series of ads in local newspapers thanking Abu Dhabi for its contribution to Gulf Air, the airline having been the national carrier for the United Arab Emirates for over 35 years, and having a large customer base located in that country. The 2005 operating year closed with a worrysome loss of more than BD80m, and a loss of BD130m ($345m) was recorded for 2006. Gulf Air haemorrhaged over $1m a day, and showed a ‘profitability gap’ of BD156m, equating to $414m.
Above: Tucking up its undercarriage, A330-200 A4O-KC departs from the UK on its return flight to Bahrain. Gulf Air has been a main sponsor of the Formula 1 Grand Prix 2007, raising its profile among Middle East operators at a time when its fortunes appear stacked against it. (Photo, Ian Schofield). For the rest of this feature please see the September 2007 issue. |
