Gulf Air, Bahrain’s state-owned airline, said it achieved cost savings of 6.8 million dinars ($18 million) in the five months through May as the financially troubled carrier works to become profitable.
Gulf Air plans a further 15 percent reduction in its cost base for 2012, Chief Executive Officer Samer Al Majali said in a statement today, reiterating an earlier target. First-half revenue rose 6 percent while the number of passengers carried increased 13 percent, the Manama-based airline said, without specifying numbers.
“The combined efforts of rationalized route network, fleet optimization, improved sales efficiency, products and services, cost efficiency measures and expenditure reduction” produced the results, Al Majali said. “This is by no means a small achievement, considering factors such as the temporary suspension of eight profitable routes and high fuel prices that have had a negative impact on our traffic and revenue.”
Gulf Air, which has estimated that it saved 25.5 million dinars in costs last year, dropped four routes in March in an effort to reduce spending. Bahrain’s cabinet said on July 8 that it will support national carriers to help them meet operational goals and compete in the region and internationally. The government was responding to a parliamentary committee’s decision against allocating more money to Gulf Air.
The state-owned carrier and privately held Bahrain Air are the only two airlines based in the Persian Gulf island kingdom.
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