At the Board meeting held on Wednesday 4th May, in Abu Dhabi, led by the Chairman of the Board HE Khalid Eid Al Muraikhi, the owner states of Gulf Air – the Kingdom of Bahrain, the Emirate of Abu Dhabi and the Sultanate of Oman…
At the Board meeting held on Wednesday 4th May, in Abu Dhabi, led by the Chairman of the Board HE Khalid Eid Al Muraikhi, the owner states of Gulf Air – the Kingdom of Bahrain, the Emirate of Abu Dhabi and the Sultanate of Oman – reviewed and accepted the 2004 financial results and gave their mandate to pursue recommendations and initiatives outlined in a new strategic document.
This comes after Gulf Air last week reported a profit of USD4 million in 2004, its best financial performance since 1997, confirming the successful turnaround of its business by Project Falcon.
President and Chief Executive, James Hogan presented a review of the year`s achievements to the Board, along with the financial results, which were endorsed and accepted at the meeting.
He thanked the Chairman of the Board HE Khalid Eid Al Muraikhi and their excellences the representatives of the owner state and thanked the government representatives, Civil Aviation and airport authorities. He also acknowledged the important role played by Gulf Air`s partners.
Mr Hogan said: Fuel costs, coupled with aggressive and uncompetitive pricing in the market, present strong challenges for the coming year. However, we are more robust and flexible now, and working with the mandate and support of the Board, we are set to implement radical measures to counteract their impact.
Having met all the objectives in Project Falcon, we are focused on our strategy for the ongoing growth and development of Gulf Air, said Mr Hogan. Areas under review in our revised strategy include recapitalization and other options such as privatisation and strategic partners, re-equipping the fleet, the reconfiguration and expansion of our route network, and the development of associated companies.
Reviewing the 2004 results, the Chairman and the Board Members praised the performance of the remarkable company business in spite of the difficulties caused by SARS, the Middle East conflicts and ongoing regional tensions, tsunami and high fuel prices, it has turned around completely as a business, returning to profit ahead of schedule. More importantly, this is a profit based on sustainable business practices within a commercial framework.
Board Members gave their full and unconditional mandate to continue to re-engineer the business from this commercial platform, taking whatever steps are required to maintain the momentum we have established over the last two years of Project Falcon.
The Board highlighted the significant achievement in the context of significant global economic challenges, the high fuel price and the very competitive regional market and congratulated the entire management team and the staff at Gulf Air on a remarkable performance, and thanked them for their dedication and loyalty.
In closing the Chairman thanked the Board and the governments of the owning states for their ongoing support.
2004 Financial Highlights
- Net profit of BD1.5 million (USD4.0 million) compared to loss of BD19.9 million (USD 52.8 million) in 2003
- Turnover up 23.8 per cent to BD476.3 million (USD1.26 billion ) (2003: BD384.6 million / USD1,020.2 million)
- Debt reduced by 7.8 per cent or BD41.7 million (USD110.6 million), reducing debt: equity ratio to 2.4
- Profits achieved despite fuel prices being BD30 million (USD80 million) over budget.
Operational Highlights
- Passenger numbers up 23.8 per cent to a record 7.48 million
- Seat factor up from 68.1 per cent to 71.4 per cent
- Passenger revenues up 28.2 per cent to BD405.3 million (USD1.075 billion) (2003: BD316.2 million / USD839 million)
- Cargo revenues up 20.4 per cent to BD53.3 million (USD141.4 million) (2003: BD44.3 million / USD117.5 million)
- RPKs up 32.5 per cent to 17,863.3 (2003: 13,481.6)
Key Business Initiatives
- USD10 million in sky beds begins roll-out
- Better for business campaign targets increased premium traffic
- Sky Chefs and Sky Nannies retain world-leading position
- New award-winning lounges in Bahrain and Heathrow
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
