Falcon Flap

Abu Dhabi’s pullout leaves Gulf Air in limbo, but not in peril. Once again, the future of Gulf Air is in question, after Abu Dhabi announced that it was pulling out. This has been a recurring theme for the carrier in recent years, with speculation over its future cropping up in 2002 when Qatar pulled out and in 2003 when Abu Dhabi launched Etihad.

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By  Neil Denslow Published  October 12, 2005

|~||~||~|Once again, the future of Gulf Air is in question, after Abu Dhabi announced that it was pulling out. This has been a recurring theme for the carrier in recent years, with speculation over its future cropping up in 2002 when Qatar pulled out and in 2003 when Abu Dhabi launched Etihad. However, unlike on these previous occasions, Gulf Air’s future now looks assured. The airline’s finances and service levels are a lot stronger now than they were even a year ago, and it should therefore be able to ride out the inevitable bumps in the road in the months ahead. The pullout may even have some advantages for Gulf Air. It firstly answers a major question for the airline, as Abu Dhabi’s departure had been expected since the launch of Etihad in 2003. The airline now no longer needs to wonder if and when this will happen, so it can plan ahead more assuredly. Gulf Air should also benefit from having fewer owners, which will simplify the management’s job, and less hubs, which will ease operations. However, while the pullout is not the disaster that some commentators have suggested, it clearly does create some difficulties for the airline. The most obvious is the future of Gulf Traveller and the rest of the Abu Dhabi-based fleet. These operations will now need to be either squeezed into Muscat and Bahrain, or reduced. There is also a perception problem in the local market, which the usually PR-savvy airline has done little to counteract. The lack of a strong public statement from senior management may well impact on staff morale and even deter customers from booking flights. If Gulf Air was making more noise though, it would have a lot to shout about. Project Falcon has clearly turned the airline around, and it is no longer the sick man of the region’s skies. Abu Dhabi’s pullout will shake the falcon, but not for long.||**||

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