Home > gulf air, profit and loss > Gulf Air, Samer Majali, new direction

Gulf Air, Samer Majali, new direction

Reuters is reporting that Gulf Air will make a shift in strategy that will focus the carrier on Middle East regional flying, and the airline will scrap most long-haul routes. The carrier plans to purchase smaller jets, like,  the Airbus A320 series and the carrier will consider even smaller regional jets, like the Bombardier C-Series. This new strategy is headed by the CEO, Samer Majali, and he hopes to return the carrier to profitability in 2012.

This new platform is really the last chance Gulf Air has in its checkered life. Many former Gulf Air CEO’s have taken the airline in different directions, only to piss off local government investors, that eventually gave up. The new Middle East focus may have made sense a few years ago, but now you have intense competition. Qatar Airways and Emirates have built up a strong regional presence, and low cost carriers, such as, Air Arabia, flyDubai, Bahrain Air, Wataniya Airways, and Sama Airlines are all staking their claim on the market.

Then you have Royal Jordanian and Egypt Air, shifting their focus on the short-haul Middle East routes and giving up their long-haul strategies. Both carriers are backed by Star and One World, and have ample cash in their coffers.

So, will this new Gulf Air strategy work? It is too soon to tell, but if you take a look at its history, things do not look good. The Middle East market shows promise, but you have several well established carriers fighting for market share; is there really room for another? I don’t think so. Of course, the oil rich Gulf states want their own airline, so maybe Bahrain will keep pouring in money to Gulf Air, but I seriously doubt this airline will be a game changer. Rather, look for it to remain a confused, loss making machine.

 

loss maker

 

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