2011 was a challenging year for Bahrain Air as political unrest across the region and on the island meant lower passenger numbers. The year saw passenger numbers drop 25 per cent down on 2010.
“At different times passengers were avoiding Bahrain, Egypt, Syria and Lebanon,” says Richard Nuttall, the newly appointed chief executive officer.“
We were required to stop operations to Iran and Iraq and for three months, Lebanon was also off limits. The causeway between Bahrain and Saudi Arabia was also restricted for a period of time. The above caused a major drop in passenger demand, and also removed some of our most profitable routes.”
“Further, the reduction in daytime destinations led to partially redundant aircraft which necessitated the suspension of flights to other destinations so that we could balance the network.”
As passenger numbers dropped 25 per cent, the airline’s flying reduced by a similar amount. “Effectively the unrest has put the airline’s growth plans back by two years,” says Nuttall.“ However, looking ahead, we expect to fly a similar number of hours in 2012 as 2010. I believe pretty much everybody in the region has been negatively affected, but clearly some more than others. It is no secret that airlines based in countries suffering from unrest suffered more than those in stable hubs.”
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“For Bahrain Air too, the UAE had some incremental business as leisure traffic that might have gone to other destinations diverted to UAE. However, overall the troubles caused airlines to reassign capacity to the same less affected markets causing overcapacity and yield decline.”
Looking ahead, Nuttall says that while passenger numbers were slowly returning, yields are still unsustainably low given current high fuel prices.
“We are looking at slow recovery and expansion back to 2010 levels. We are revisiting some of the stations we had to leave and if we get the appropriate approvals, will start three to four new routes. But we will not exceed the number of aircraft we had in 2011. This growth will be achieved by better utilisation as the markets recover. We can be more aggressive longer term once we see the market return,” he adds.
“Our product has continually upgraded since we started life as a low cost carrier,” says Nuttall.“ We are now very clearly a premium value carrier or hybrid airline. This year we are upgrading our premium class. We will start introducing new seats from March. In tandem we are improving our meal service and will be introducing tablets for in-flight entertainment. It is now a very small step from where we are to becoming a full-service carrier.”