Gulf Air says will not downsize fleet to reverse 2001 losses
Gulf Air will take another year of losses before the turnaround begins, according to CEO James Hogan. Even though the 2001 losses are $132.3 million, Hogan expects to break even in three years.
Gulf Air’s new chief executive has promised that the airline’s fleet will not be reduced. It is the only part of the recommendations made by consultants, which James Hogan has rejected.
Hogan was revealing the airline’s 2001 results and more details of his restructuring plan, which must be approved by the board in August. Gulf Air made a net loss of $132.3 million in 2001, up more than $34 million from the previous year’s loss of $08.1 million.
Announcing the numbers, he admitted that the carrier would lose money again this year but break even after three years. He blames the downturn on structural problems, over-staffing, bureaucracy and the fundamental mistake of losing its customer focus. He has already embarked on a retirement and redundancy plan in an effort to cut staff costs.
In a surprise move, he also reported that he is hopeful of persuading Qatar to rejoin the troubled consortium of GCC states that owns the airline. The remaining members are Abu Dhabi, Bahrain and Oman. He revealed that, although the Qatar government withdrew its 25% stake in the airline in May, there is a six month negotiation period and he hopes to persuade them to rejoin. That could prove difficult, with Qatar pouring money into an ambitious expansion project for its own national airline, Qatar Airways.
Both James Hogan and the CEO of Qatar Airways, Akbar Al-Baker are interviewed at length in the August edition of Arabian Business, due out next week.