GF wins turnaround title

Gulf Air’s corporate makeover has been recognised by the Centre for Asia Pacific Aviation (CAPA), which has given the carrier its prestigious Airline Turnaround of the Year Award.

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By  Neil Denslow Published  January 5, 2004

Gulf Air’s corporate makeover has been recognised by the Centre for Asia Pacific Aviation (CAPA), which has given the carrier its prestigious Airline Turnaround of the Year Award. The award is presented each year to the airline whose affairs were most significantly transformed during the previous 12 months. “Gulf Air languished for a number of years, watching while neighbouring airlines flourished. But over the past year and a half, under new management, led by president & chief executive, James Hogan, Gulf Air has again become an airline to be reckoned with, and a market leader,” the CAPA noted in its citation. In response, Hogan says: “I am delighted to hear of this award, and the industry recognition for the unprecedented change that has taken place at Gulf Air. Few people either in the market or the industry believed that a turnaround for the airline was possible. At the beginning of 2002, the company was all but written off, when the board gave the management team a brief to restructure the airline with the aim of restoring Gulf Air as a world class commercially viable operation.” GF’s turnaround has been impressive. The carrier reported losses of around BD 52 million (US $138 million) for the 2001 financial year, and the management at the time, projected similar figures for 2002. However, by the end of 2002, the new team led by Hogan was able to cut this figure to BD 40.6 million ($108 million). Under its three year turnaround plan, the carrier aimed to cut losses to BD 20 million ($53 million) by the end of 2003, break even in 2004 and return to profitability in 2005. The carrier is on course to meet these targets following a hectic year of change. “We have met our financial target for the first year achieving a 50% decrease in Gulf Air’s losses and our balance sheet is much more robust. However, more importantly, we have done everything we said we would,” notes Hogan. “We have astounded even the greatest sceptics, who believed we would not be able to achieve even half of what we set out to achieve.” “In a traumatic year, affected by regional tensions, the war in Iraq and the damaging SARS virus, a year in which most airlines have been downsizing and cutting capacity, Gulf Air has achieved positive growth with record passenger figures.” “This has been made possible through the disciplined and creative implementation of strategy, which focuses on good corporate governance and financial discipline supporting creative customer-centric innovations in products and services.”

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