"This budgetary projection of cutting losses to BD60 million ($160 million) is seen as a realistic step to achieve by the airline and we see it as a positive move in the right direction of achieving financial sustainability," Samer Majali, chief executive officer (CEO) of Gulf Air, told the participants of the MSB Conference held at Ritz Carlton Hotel.
Gulf Air reported losses of $510 million last year and this figure is likely to be reduced to $350 million, according to the budgetary projects for the year 2010.
Majali also made it clear that the financial injection of $1 billion was a part of the 2010-2012 three-year turnaround plan and the airline will not seek more financial input from the government by 2012.
According to Majali, extra capacity in GCC and stiff competition is behind the erosion of the profitability of the airlines across the region.
Imagine, he said, the total orders of the aircraft worldwide in the pipeline constitutes 50 percent from the GCC alone, this gives more realistic picture of the current and future overcapacity.
Gulf Air, Majali said, carries five million passengers a year and out of it four million comes from the most competitive markets means with minimal profit margins.
