Gulf Air lays off 15% of staff in restructuring

Gulf Air, Bahrain’s national carrier, has laid off 15% of its staff and cut four of its loss-making routes since January as part of its restructuring, the airline has said.

The loss-making carrier, which announced its restructuring in December, said the measures had so far helped reduced its overall costs by over 34 percent.

Gulf Air, which has suffered amid stiff competition from nearby Emirates Airline, Qatar Airways and Etihad Airways, said it remains on track to achieve overall cost savings of 24 percent by the end of the year.

“In January 2013, through the implementation of prudent cost-saving measures and an aggressive efficiency drive the airline reduced its overall losses by over 34 percent compared to Jan 12, posted 9.6 percent increase in passenger revenue against its budgeted revenue and, increased its yields by over 8 percent,” the airline said in a statement.

“Based on the current progress and the estimated forecasts, the restructuring plan is on track to achieve its cost savings target by the end of 2013,” it added.

Gulf Air has been struggling to compete against GCC rivals amid rising fuel prices and declining passenger numbers. The carrier was also hit hard by the regional political instability during the Arab Spring.

The carrier, which once had the biggest network in the Gulf, has axed several routes from its network in recent months, revised orders from Boeing and Airbus and slashed its staff in a bid to stem its losses.

Gulf Air has cut 15 percent of its staff since the beginning of the year and warned that further redundancies were on the way. It said this process would be completed by the second quarter of 2013.

“As per the mandate of the kingdom’s government the airline’s priority in Bahrain is to preserve as many positions that can be filled by skilled and qualified nationals. No Bahraini pilots will be affected by the restructuring,” said Gulf Air.

Gulf Air’s services to Copenhagen and Rome were cut in 2012, and Kathmandu, Dhaka and Colombo are facing the axe this year.

The airline did not confirm which routes it had cut but has previously said it will focus on Middle East and North African routes, as well as providing a limited number of routes to selected European and Asian markets. Its network realignment is expected to be completed by March 2013.