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  • ANALYSIS: Bahrain raises its game in aviation

ANALYSIS: Bahrain raises its game in aviation

Bahrain – the aviation capital of the Gulf in the last third of the 20th century – has had to watch from the sidelines over the past two decades as neighbours Dubai, Abu Dhabi, and Qatar have vied for its former position. Each of these emirates has invested hundreds of billions of dollars in their own airlines and a huge global hub, while Bahrain-based Gulf Air – once a four-nation flag-carrier – has shrunk in size and status. Bahrain's international airport, previously the gateway to the Gulf region, was last refurbished in the mid-1990s.

However, the island kingdom is determined to regain its place as a major player in Middle East aviation. Its rulers may have no ambitions to compete for scale against the big three global connectors Emirates, Etihad and Qatar Airways, but state-owned Gulf Air is being revitalised under former Croatia Airlines chief executive Kresimir Kucko. At the same time, a new building almost four times the size of Bahrain’s rather tired and overcrowded airport terminal is being readied to replace it.

The country, which hosted its first Formula One Grand Prix in 2004, has also been part of the international air show circuit for the past eight years. The fifth Bahrain International Air Show takes place from 14-16 November at the Sakhir airbase, next to the motor racing track. Co-organised by Farnborough International – the organisation behind the biennial UK event – Bahrain is promoting its show not as a rival but a complement to the older and larger Dubai event, which takes place every other November.

While Bahrain’s population of just under 1.6 million gives it the smallest domestic market of any Gulf country and a very modest defence budget, two factors ensure it punches above its weight. Firstly, its liberal, open economy has for decades made it one of the region’s main crossroads for trade and financial services. Secondly, its close geographical, political and cultural relations with Saudi Arabia mean it is a stepping stone to the Middle East’s largest economy.

Drive around Manama and you will see almost as many cars with Saudi registration plates as Bahraini ones. A causeway link means east coast cities such as Dammam and Al Jubail are less than two hours’ drive away. A large presence at the show from the defence ministries of Riyadh and the other Gulf Cooperation Council nations (minus off-the-invitation-list Qatar) is another big attraction for Western exhibitors such as Lockheed Martin and BAE Systems.

The show organisers position Bahrain as a “boutique” and “intimate” event, where exhibitors purchase an off-the-shelf hospitality package in one of 40 identical suites, or – since 2016 – stand space in an adjacent exhibition hangar. Its smaller size makes it less frenetic than other industry events, and exhibitors have time to entertain guests properly and network with other attendees, maintains show director Yousif Mohammed Mahmoud. “We have 40 chalets and we won’t go beyond that,” he says.

The show provides an impressive flying display, including the US Air Force’s Lockheed Martin F-35, Russia’s Ilyushin Il-76 “zero gravity” demonstrator, and the Italian air force’s Frecce Tricolori demonstration team. Unlike most air shows, some 50% of the 100-plus aircraft on the static at Bahrain will take to the sky at some point. Another difference from other events is that the display lasts a full 3.5h. “We own the airspace, so we have control. Companies can even arrange to do their own customer demonstration flights,” says Mahmoud.

Exhibitors include Airbus, BAE Systems, Boeing, CFM International, Embraer, Gulfstream, Leonardo, and Rolls-Royce. Russia and Turkey are represented, and, for the first time, the USA has a dedicated pavilion in the exhibition hangar. Another unique feature of the show is that the public watch the air display from a “theme-park” enclosure on the other side of the runway. One of the government’s objectives is to get ordinary citizens enthused about the industry and encourage youngsters to take up aviation careers.

Unsurprisingly, flag-carrier Gulf Air will have a major presence at its domestic show. Under new chief executive Kucko, the airline has been undergoing a metamorphosis, and this year added the Boeing 787-9 and Airbus A320neo to its fleet. The former Croatia Airlines boss, who took the helm in November 2017, insists that Gulf Air will compete with local rivals and other blue-chip carriers “only on quality”, with its main selling points being its young fleet, network of regional routes, and “unrivalled passenger experience”.

Kucko’s strategy includes expanded routes and frequencies and a brand refresh for the Middle East’s most venerable airline, which celebrates its 70th anniversary in 2020. Although on order before his arrival, the new aircraft are part of his ambition to operate the region’s “youngest fleet”. So far, the carrier has taken five of 10 787-9s it has on order – a major departure after many years of being an Airbus-only operator – and added its first A320neo.

The CFM International Leap-1A-powered narrowbody is one of 12 on order, together with 17 of the A321neo. While the A320neos will fly chiefly on regional routes, its larger siblings, to arrive from 2020, will focus on medium-haul services to Europe and the Indian subcontinent. The 39 new aircraft will replace A330s and A320ceo-family types, although some legacy aircraft will remain, taking the total fleet to around 50 aircraft by 2023, from 33 today, says Kucko. In addition to the 10 787-9s on order, Gulf Air has options for a further six.

Kucko wants to increase Gulf Air’s network from 47 to 65 destinations in five years, including the introduction of ultra-long-haul routes to the USA. Its longest-range services are currently Bangkok, Manila and London. The last four of the Rolls-Royce Trent 1000-powered Dreamliners to arrive, in 2020, will be fitted with crew-rest facilities, allowing pilots to switch on longer flights. Longer-term, services to China and other Southeast Asian hubs such as Singapore and Kuala Lumpur are also possible, he says.

With Bahrain’s small population, Gulf Air – like its Arabian counterparts – cannot rely on origin and destination traffic, and another part of Kucko’s strategy is to offer the best hub connections for passengers transferring within the Middle East and North Africa. Key to that will be Bahrain’s revamped airport, where the new terminal building is under construction and due to open towards the end of 2019. This will take Bahrain’s capacity from just under nine million passengers (in a facility designed for just four million) to around 14 million.

Much of the current terminal – opened in 1973 – will be demolished, with the new 12-gate building incorporating a hotel and features such as a traditional Arab souk or market. In a throwback to 1970s-era airports, however, there will even be an airside open-air terrace. Other enhancements to the airport include a new cargo area, maintenance hangars and Bahrain’s first general aviation terminal, to be housed in the original 1950s-built airport building.

Gulf Air will remain the “anchor airline” at the new facility. The flag-carrier will have its own dedicated check-in area and a direct route to departures for premium passengers. However, the Bahrain authorities are keen to advance their open skies credentials by welcoming as many other airlines as possible. The premium lounges – one for Gulf Air and another shared by other airlines – will be much bigger than in the current terminal, says Mohamed Yousif Al-Binfalah, chief executive of Bahrain Airport Company.

Attracting third-party tenants to the airport is part of Bahrain’s strategy to position itself as a hub for training, maintenance, and freight. Since the 1990s, delivery giant DHL has had its Middle East headquarters in the kingdom, from where it operates around 10 aircraft. Another, smaller, cargo specialist that calls Bahrain home is specialist operator Texel Air. Since 2013, the operator has been quietly making a name for itself transporting everything from livestock and engineering equipment to drum kits and amps for touring rock bands.

Texel, owned by Bahrain-based aviation consultancy and services provider Chisholm Enterprises, operates two Boeing 737-300 freighters under a Bahraini air operator’s certificate. These are former airliners that have been re-configured to carry both cargo and accompanying passengers. At the Bahrain show, the company will unveil its new flagship, the first 737-700 FlexCombi freighter conversion from Tampa-based Pemco World Air Services.

Pemco launched the programme for the Next Generation type in April last year and announced Chisholm as its first customer. The 14-year-old aircraft – registration A9C-FLX, for “flexible” – will go into service in January 2019. It is the fifth Pemco converted freighter Texel has operated and, according to Chisholm Enterprises chief executive George Chisholm, represents a “huge investment” for the company, which worked with Pemco to design and fund many of the supplemental type certificate modifications.

True to its name, the aircraft’s “USP is its flexibility”, he says, with six different combinations of seating and cargo compartment, ranging from 24 economy seats and space for six standard pallets to four business seats with seven cargo containers. There is even a medevac option. Texel’s team are able to reconfigure the interior in 48h. Features include removable bins for passengers’ carry-on bags, a full lavatory and galley, a Gogo connectivity system, passenger windows, and retractable rear air stairs for landing at remote locations.

George Chisholm believes Texel’s highly specialist service offering has helped the company increase its customer base steadily without having to shout too loudly about it. “We are the only 737 freighter in the region, so we fill a niche,” he says. “We tend to get referred by word of mouth.” Customers come via brokers or directly, and contracts range from one-offs to multi-charter or ACMI (aircraft, crew, maintenance and insurance) arrangements.

While not strictly speaking a third-party operator, training organisation Gulf Aviation Academy has been independent of sister company and largest client Gulf Air since it was spun off in 2009. From its site next to the airport, it offers packages on A320 and A330 full-flight simulators, as well as courses in the likes of cabin crew safety, air traffic control and airport security. “Our appeal is that we are non-affiliated, so we are fully independent,” says chief executive Capt Dhaffer Al Abbasi, a former Gulf Air management pilot.

GAA’s equipment reflects not only the main aircraft in Gulf Air’s fleet but two of the most popular narrowbody and widebody families in the region. As well as Gulf Air, prominent A320 operators in the region include Kuwait budget carrier Jazeera Airways, which was the first in the region to take delivery of a Neo early this year. Other local clients include Kuwait Air and Saudi Arabia’s Flynas, with IndiGo and GoAir from India, as well as Portugal’s TAP, recent customers.

Defence, of course, will be a significant element of the Bahrain air show, with major contractors from Europe and the USA keen to maintain contact with customers from Saudi Arabia and other Gulf Cooperation Council countries, including Bahrain. Despite the nation's comparatively small military budget, it is responsible for keeping Lockheed’s F-16 production line ticking over after signing a contract earlier this year to launch production of the Block 70 variant on a new final assembly line in Greenville, South Carolina.

The initial deal is for 16 examples of the latest version of the 45-year-old fighter, and is vital for the airframer as it allows it to market the in-production type to other potential buyers such as India. The sale to Bahrain was made possible after the Trump administration reversed an Obama-era block on the deal relating to human rights concerns. The new batch of Block 70 F-16s will add to Bahrain’s existing combat air fleet, which includes older F-16s and ageing Northrop F5Es.

Bahrain’s government has identified aviation and aerospace as key economic multipliers, which will help the island kingdom boost its reputation as one of the easiest countries in the Middle East in which to do business. “We want to be the home of international companies, and, in order to do that, we need to be connected to the region and the world,” says Kamal bin Ahmed Mohammed, Bahrain’s minister of transportation and telecommunications. “We need a comprehensive and integrated plan to develop our transport sector.”

With Gulf Air’s fleet and route revamp, the opening of a new airport terminal, and a push to attract aviation service providers to set up shop in the country, the strategy is beginning to take shape. There may not be room for a fourth mega airport and global airline in the Gulf, but Bahrain believes that it can still play a major role in the development of aviation in the region.

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