Bahrain gears up to regain its status as centre of Gulf aviation

London
Source:
This story is sourced from Flight International
Subscribe today »

Bahrain is determined to once again become a pivotal point for aviation in the Middle East. The island kingdom was the gateway to the Gulf for decades, but the rise of Emirates and Dubai and the emergence of Etihad and Qatar Airways have seen the centre of gravity shift firmly to the eastern Gulf.

The decision by its neighbours to go it alone has left Gulf Air - once the undisputed four-nation flag carrier for the whole region - as a shadow of its former self, with a single base in Bahrain.

After years of trying to compete head-on with these new airlines, the country now appears to have had a reality check, with a new chief executive and approach for Gulf Air which recognises its future much more as a short-haul carrier, and an emphasis on restructuring the wider Gulf Air business to create profitable, standalone units in maintenance, repair and overhaul and in training able to compete for third-party customers.

bahrain cityscape, rex features
 © Rex Features

The strategy is being driven by Mumtalakat - which like Abu Dhabi's Mubadala is the holding company for state-owned assets. Two new independent companies have been set up. Gulf Aviation Academy is Gulf Air's former training department while Gulf Technics will lead the push into MRO. It plans to establish a new facility at Bahrain airport and has signed a memorandum of understanding with SIA Engineering (SIAEC) of Singapore.

"We are capitalising on Gulf Air's long experience in the aviation sector," says Mumtalakat's Ahmed Al-Rayes. With the home airline remaining as the anchor client for both companies, the plan is to gradually increase the proportion of overseas customers. Bahrain does not have the "economies of scale" to provide sufficient home-grown business, so the country has to look outward, he says.

When it comes to GAA, "all the fundamentals are in place for a strong business", says Al-Rayes. The company's equipment reflects the Gulf Air fleet with two Airbus A320 and one A330/A340 simulator, with an Embraer 170/190 machine due at the turn of the year. GAA's premises, opposite the airport, are being renovated and Al-Rayes is confident that the proportion of third-party business can rise from 40% today to 80% in three to five years. The company offers both "wet" and "dry" training, where a customer simply rents time on the simulator with their own instructor.

gulf air a320 gulf air 
 © Gulf Air

As well as maintenance and cabin crew training, one area of additional activity GAA will target is human factors training for non-aviation customers, including the medical, emergency services and hospitality sectors. "Some international clients have approached us to carry out team-building exercises. We believe we can listen to clients and customise training for them," says Al-Rayes.

GAA has 40 staff, most of whom, including the instructors, are Bahrainis who formerly worked for Gulf Air. However, several of the engineers and managers, including new chief executive Tim Shattock, are expatriates. Although "developing local talent" is key, Shattock expects to be looking overseas to fill about five engineering vacancies in the short term.

ahmed al-rayes - mumtalakat, andrew costerton/flightglobal
 © Andrew Costerton/Flightglobal
"We are capitalising on Gulf Air's long experience in the aviation sector"
Ahmed Al-Rayes
Mumtalakat

The ambitions for Gulf Technics are even bigger. Mumtalakat is finalising details for a new hangar, due to open in 2012, and the joint venture arrangement with SIAEC. The Singapore company has had the contract to maintain Gulf Air's 34-strong fleet since the break-up of the four-nation consortium in the mid-2000s meant the former Gulf Aircraft Maintenance Company in Abu Dhabi became a sister company of Gulf Air's rival Etihad.

Al-Rayes expects outside business to grow from 40% to at least three-quarters of revenues in five years. Although GAA and Gulf Technics will be separate businesses, he expects some airlines to choose Bahrain as they can organise their training and maintenance in one place.

Because MRO contracts are often agreed for three to five years, Gulf Technics has the opportunity to start bidding now for deals due to be renewed from 2012. "The marketing begins now," says Al-Rayes. Although "starting with a blank sheet" gives Gulf Technics the chance to keep its costs lower, the company will not be chasing the lowest common denominator.

"There is room in the market for state-of-the-art excellence," he says. "We will not be a cost leader."