Manama, Gulf Air, has announced its cost cutting measures yielded savings of Bahrain Dinars 25.5 million (US$ 67.6 million) across its business operations for the financial year of 2011. The cost reduction drive was launched in 2010 reflecting  its newly implemented business strategy, focusing on cost-efficiency and manpower optimization. 

For 2012, the airline has set a target of 15 percent reduction in its cost base. It has achieved a savings of Bahrain Dinars 6.8 million (US$ 18 million) between Jan and May of this year. The recently announced in-sourcing of the airline’s fleet technical management services is expected to yield an estimated annual net savings of Bahrain Dinars 5.4 million (US$ 14.3 million). 

Samer Majali Gulf Air's chief executive officer said, ”I am glad to report that our several restructuring initiatives aimed to reduce costs have helped us reduce our operating losses, achieve cost efficiencies without affecting the quality of our products and services offering and customer service.

“Despite a very difficult 2011 caused by the regional geo-political situation and higher fuel prices that have severely impacted our business, we were able to achieve this. We used this difficult period as an opportunity to focus internally reviewing our functions such as operations, services, products, fleet maintenance, fuel savings, contract negotiations and manpower optimization. We applied tighter control over expenditure and implemented cost-control measures, higher asset productivity and more streamlined processes.

“While we are pleased with what we have achieved so far, we have set a definitive action plan for 2012 to achieve a further 15% reduction on our cost base this year and are aggressively pushing forward towards our target.

“All these measures are being taken while maintaining the highest levels of flight safety, schedule reliability and passenger convenience. The credit goes to all my colleagues at every level and every department, who have been working together to achieve this.” 

During 2010-2011, Gulf Air reduced costs by 12% with revenues of Bahrain Dinars 405 million (US$ 1 .07 billion). According to the airline this was achieved through negotiations with suppliers on compensations, warranties, renegotiation of contracts, reduction in lease charges, disposal of engine scraps, aircraft weight management, changes in inflight products and other measures. While the introduction of the latest Airbus A320 aircraft achieved a total fuel savings approximately Bahrain Dinars 1.4 million (US$ 3.7 million).

Currency Conversion Rate

1 Bahrain Dinars = 2.65252 US$
1 US$ = 0.377000 Bahrain Dinars