Gulf Air reports best financial results for four years in 'toughest aviation year ever'

Despite what the airline described as the "toughest aviation year ever", with the devastating impact of SARS and the Iraq conflict, the results meant Gulf Air exceeded its Project Falcon turnaround target of halving losses. Project Falcon is a three-year programme that aims to return Gulf Air to profitability by 2005.

Gulf Air reported record passenger numbers of 6,047,447 in 2003, up 10.4 per cent on 2002 (5,478,556). Passenger growth was driven by network and service enhancements, competitive pricing in all markets and the successful launch of Gulf Traveller, the airline's all-economy subsidiary.

Gulf Traveller was just one of a number of industry-leading initiatives rolled out by Gulf Air in 2003. The Sky Chefs service is now available in first class on 10 destinations and in November 2003, Gulf Air announced a world first with Sky Nannies, Norland-trained specialist flight crew who look after children in all cabins on long-haul flights.

The airline also launched the region's first electronic check-in kiosks at airports in Bahrain, Abu Dhabi, Dubai and Oman, and other innovative services included worldwide traveller notification via short message service (SMS) and downloadable e-timetables.

James Hogan, President and Chief Executive of Gulf Air, said: "2003 was the toughest aviation year ever. The Iraq conflict created massive uncertainty in the region; then SARS took its toll. Together, the impact on airlines was devastating.

"Yet in the face of this, the staff of Gulf Air hit their financial targets and cut losses by more than 50 per cent, delivering the best results since 2000. Most importantly, they did this not by arbitrary cost cutting, but by building the foundations on which this business will return to profitability and will grow in the future. I salute them for their incredible efforts.

"We are committed to the creation of a sustainable commercial platform. As an airline, we faced the toughest aviation market ever in 2003 and came through not just unscathed but significantly stronger. As an airline, we will continue to deliver world-leading services along the road to profitability and growth.

"Project Falcon could have been derailed by the global events of the first half of 2003. Instead, we delivered the best net income performance since 2000. Project Falcon remains on track and we look forward to putting this airline back where it belongs as a profitable, world-leading innovator."

New Gulf Air destinations introduced during 2003 included Sydney, Athens, Kochi, Bangalore and Kolkata. The airline had a fleet of 34 aircraft at the year-end, with three additional aircraft being introduced to the fleet during 2003.

In September, Gulf Air opened the region's first Worldwide Customer Contact Centre, handling reservations from across the globe, in Oman. Operated entirely by Omani nationals, the centre will employ 300 people when fully operational.

Commenting on 2004 performance to date, James Hogan said: "The hard work of 2003 is delivering clear results in 2004. We are seeing year-on-year passenger growth of 32 per cent and we are confident of reaching our Project Falcon break-even target this year. However increasing competition in the region and the significant increase in jet fuel prices will place additional pressure on the airline's performance."

Gulf Air experienced its most successful week ever in April, with the staging of the Gulf Air Bahrain Formula One Grand Prix, which drew public acclaim as a showcase for the region and for Gulf Air.