Gulf Air turnaround takes off
President and CEO, James Hogan, says the turnaround plan will focus on improved service, destination-oriented advertising and punctuality.
Implementing new standards of service and a big European advertising campaign are among the measures being taken by the new management of Gulf Air to bring the national carrier of Abu Dhabi, Bahrain and Oman back to profitability. In an exclusive interview with Arabian Business, the president and CEO, James Hogan, says he is confident of achieving breakeven within two years and posting operating profits by the end of the third.
Even the first cautious steps at restructuring, including downsizing, a new increased focus on customer service, the introduction of efficiencies and eradication of obsolete or ineffectual processes, have begun to bear fruit, he insists. Among the first phase of changes, chefs have been recruited from five-star hotels and restaurants from all over the world to try to add a new dimension to the airline’s First Class service. Hogan introduced this during his time at British Midland, which has been rated 5-star on transatlantic routes by Business Traveller.
He believes the new service reflects the greater focus on the customer and their needs. “In line with modern restaurant trends, new initiatives focus on providing top-quality fresh food at flexible times with the best of service. Gulf Air is creating a real ‘Restaurant in the Sky’ feel. It’s all about the airline reflecting the needs of the customers, and not the customers fitting in with our needs,” he says.
The in-flight chefs were to be introduced initially on routes to London from September 6. However, there are plans to expand the ‘Restaurant in the Sky’ service across the network, including flights to Paris and Frankfurt.
In addition to the chefs initiative, the airline is also developing a new generation of TV advertising for the European market. “These will be highly focused on our destinations,” he said. “We fly to some exotic places and the pictures will be a lot stronger than the current TV ads.”
One of the first things a visitor to Gulf Air’s headquarters in Bahrain might now notice is a digital notice board, which gives a constantly updated readout of the airline’s performance figures. After just two months it makes good reading, showing that On-Time Performance (OTP) results for July showed an 8% improvement on figures for the same period last year, with 66% of flights leaving on time, and 84% of flights taking off within 15 minutes of schedule.
Cost savings from measures introduced several months ago are also bearing fruit. “In July, efficiency measures generated savings amounting to BD1.8 million in variable costs and BD0.7 million in direct fixed cost. It is expected that these savings will escalate as the programme of efficiency drive gains momentum,” says Hogan.
Another important weapon in the battle for survival is communications. The management team had been mandated to communicate the changes in detail at numerous, regular staff meetings and he had been delighted at the response.
“This airline cannot be turned around without the full support of the staff here, and therefore they need to know why change is critical and understand the role they have to play in the process,” he said. “The response has been very positive, with a high level of appreciation for us telling them what we are trying to do and how we plan to do it.”
He added that the integration of existing and new management staff is also having a major impact on the change process. “We now have a really strong management structure and more importantly a team that is all pulling in the same direction – towards building a better Gulf Air.”