Bahrain Air Still Constrained As It Seeks To Spread Its Wings

AIN Air Transport Perspective » July 30, 2012
Bahrain Air's growth remains constrained by political uncertainty at home and uncertain economic times.
Airbus A320 operator Bahrain Air wants to increase the size of its fleet from four to nine aircraft over the next three or four years.
July 30, 2012, 3:45 PM

Bahrain Air got started close to the onset of the global economic slowdown and has found it hard to escape its grip. Incorporated in 2007 and operating its first flight in February 2008, the carrier has struggled to thrive in the cut-throat arena of the Arabian Gulf’s air transport market. Its passenger count rose in 2010 to 720,000, but, given the acuteness of a second downturn and Bahrain’s political crisis, fell in 2011 to 640,000 and appears unlikely to grow this year.

Bahraini investors privately own 65 percent of Bahrain Air, while Saudi interests own the remaining 35 percent. The original plan called for the establishment of a low-cost carrier, but it became quickly apparent that the model wouldn’t work in tiny Bahrain. CEO Richard Nuttall now describes Bahrain Air as a “premium value” airline, which offers passenger connectivity, rather than just point-to-point services, making it a nearly “full-service” carrier.

The company operates two Airbus A319s and two A320s, averaging four years of age. Nuttall eyes a fleet of nine aircraft as optimal. “We know that the current size of the fleet does not work long term,” he told AIN, adding that he’ll need to replace the two A319s, due to go back to lessors in 2014 and 2015. It earlier flew six aircraft but traffic-rights issues and government intervention forced it to restrict operations to certain routes, including Lebanon, Iran, Iraq and Syria. According to Nuttall, Bahrain’s troubles will make it difficult to expand the fleet for the next 12 to 18 months.

“We won’t make decisions on the acquisition of those aircraft until we have more clarity on the situation,” he said. Bahrain Air says it operates 79 flights a week to 21 destinations, and hopes to add 15 routes, including five more to India and three each to Egypt and Pakistan, up to 2016. The long-term future for Bahrain’s ailing incumbent, Gulf Air, remains unclear. With 80 percent route replication between the two airlines, Nuttall claims the government wonders “whether it can afford Gulf Air in its current format.” Competition between the two sometimes proved “beyond healthy,” he said. On the possibility of a merger, he sees a number of outcomes. “If there is to be a merger with Gulf Air, that is a solution we are open to,” he said. “There is nothing on the table.”

 

 

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