IN FOCUS: Bahrain Air puts faith in premium value model as it competes with Gulf Air in tiny market

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At first glance, Bahrain's other airline - Bahrain Air - would seem to have its work cut out. Serving a population of only 1.2 million and competing with larger rival Gulf Air on all but one of its 13 full-service routes, the privately-owned Airbus A320-family operator, formed four years ago, must take second place behind the state-owned flag-carrier when negotiating authorisation to fly to new destinations.

"Our ability to fly where we fly is contingent on traffic rights. The rule of thumb is that if Gulf Air have traffic rights, we negotiate on top of that," says newly-appointed chief executive Richard Nuttall.

Despite this, and the knocks to its business as a result of upheavals in the country in 2011, he is convinced the airline - owned by Bahraini and Saudi investors - can slowly expand its niche in the market as a "premium value" carrier.

bahrain air a319, airteamimages.com

© AirTeamImages.com

Bahrain Air operates three A320s and two A319s and, although it has no aircraft on order, is considering acquiring additional capacity during the next two years.

"In the narrowbody market, we can lease fairly quickly," says Nuttall, who was previously commercial operations director. Beyond that, "we are talking to Airbus and Boeing about 2014 or 2015 deliveries". Any growth, however, will be "dependent on traffic rights", he admits.

The airline is also subtly altering its marketing strategy. "This is not a market to be low-cost," he says. "There aren't enough passengers. So we offer a two-class service with baggage and proper meals. But we need to shift our distribution system, which was built around a low-cost model."

A new booking system offering passengers more flexible reservations is on the cards. In a further bid to capture premium customers from its rival, Bahrain Air will unveil a new business class cabin at the show.

Nuttall is realistic about the environment in which Bahrain Air has to compete - and that having two airlines offering a similar service to more or less the same destinations from a tiny domestic market may not be sustainable in the long run.

"There is a government-level review going on of aviation in Bahrain," he notes. "The road map we are following assumes nothing will change and that we will go on growing organically. However, we would welcome any opportunity to work with Gulf Air."