Gulf Air free essay sample

In a world of globalization, speed and technology where everyone is seeking for ways to accomplish their duties easily, and where countries have been connected with each others by economical, commercial, and political affairs, airlines companies appeared as an integral part of the channel of transportation in different countries of the world which have been recently one of the most important ways to carry passengers and goods from a place to other distant places. Among those companies the Gulf Air Company was established in 1950, and since that time it has gone through many stages and conditions, until it reached within these years to a level of the need of restructuring; because of the sequence losses it has faced. As a company that owns the largest aviation network in the Middle East and as it carries a history of about sixty years, it is significant to figure out the main factors that lead it to reach to a loss that is equivalent to BD 190 million in only 2009. We will write a custom essay sample on Gulf Air or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page This loss is substantial and definitely has negative consequences on the entire Bahraini economy, since the Gulf Air is known as one of the most important ventures that provide employment for significant number of Bahraini population, and therefore have an effect on the Bahraini GDP. Hence things should be analyzed and problems have to be diagnosed in order to find out some hinders and drawbacks, and list some strengths and advantages to reach at the end to general beneficial conclusion. -History of Gulf air. Since the establishment of the Gulf aviation company as a private shareholding company on 24 March in 1950 and it has gone through many changes and stages. First in October 1951 the British Overseas Aircraft Corporation (BOAC) became a major shareholder in Gulf Aviation, holding a 26% of shares, and handling the company administrative activities, until 1973 when they were purchased by Abu Dhabi, Bahrain, Oman, and Qatar governments. In the next year a foundation treaty was signed by those countries governments which gave each one of them a 25% shareholding in the re-branded Gulf Air, which became the national carrier for the four states in the Arabian Gulf with a capital that is equal to BD 28m. After this turning point the Gulf Air started expanding its activities in various fields starting with making trips to the Middle East countries, India, and Europe, and that was accompanied with adding the Tristar and Boeing 200-737s to the fleet. The year 1978 was a beginning point of the sequence losses that the Gulf Air faced as a result of previously done developments and expansions. The loss in that year reached to an amount of about BD 29m, and therefore the company was declared financially bankrupt for inability to pay its obligation which came as a result of overcoming the problem by increasing the amount of the paid capital. Hence the Gulf Air prepared a new plan to counter the problems associated with the previously occurred losses, by applying several steps like cutting unnecessary costs, and eliminating unprofitable trips, as well as following new and flexible promoting techniques while keeping service continuously in high levels. In 1980 the four states came to the conclusion of increasing their support to the Gulf Air by increasing its capital from BD 28m to BD 40m, which relatively contributed in improving its general conditions. In other stages several expansions and improvements were enhanced, when the company transferred from a regional aviation network to an international one that links between Asia, Africa, and Europe. In addition it was necessary in that time to work hard on preparing skilful national staff for different activities like maintenance, operating, and administrative activities. In the late seventies and early eighties of the last century the Gulf Air reached to a level where it was able to compete with international rivals which was as a result of the substantial improvement of its labors skills, in the other side the financial resources of the company were facing vital increments and therefore a strong financial condition was built which encouraged the company to invest its resources in other different ventures. In 1988 the management of the company came out with a new strategy that focused on the importance of getting use of the international expansions and cutting cost by using new technology in air planes to help in reducing the fuel used, as well as other related expenses, and not to forget about adjusting operational and promotional plans. But in the time between 1986 and 1987 improvement waned and was replaced with decreased revenue as a consequence of several political and economical factors such as, the establishment of the emirates air lines and the war between Iraq and Iran which reached its peak at that time and affected the economy of the entire region around these countries. In contrast the eighties was a period of achievements and improvements for the Gulf Air in various fields, when the Gulf Aircraft Maintenance Company (GAMCO) was established in 1987 with the contribution of Abu Dhabis government which helped the Gulf Air in finding a replacement for the use of the services of maintenance in Hong Kong and London. In general that period was a period of good conditions of the company where its revenue was increasing and consequently helped in buying and chartering new air planes, increasing its capital and its stockholders shares. In addition the good reputation of the company at that time helped it in attracting many international Banks to its new projects and ventures. And one of the most remarkable steps was making analytical studies for its operational strategies and economy as well as trying to improve employees skills and efficiency and following a new strategy of recruiting workers from the Gulf countries. In 1991 conditions were more stable after the ending of the Gulf war in the 1990, which helped in providing better levels of services for clients especially for destinations like India, Cairo, London and Paris. In the next year and after a new pricing strategy and occurrence of regional competition a surplus of service occurred and caused decline in revenues after an increment in the previous year. In the period after the 1995 the government of Qatar followed by Abu Dhabi then Oman governments withdrew from the company to establish their own national airlines, which inversely affected the Gulf Air over the last years and caused many losses. In the 21st century many changes occurred and the company had involved in many sponsorships and social responsibility acts until this year of 2010 where the company reached its 60 year anniversary, a new sight of eliminating unprofitable lines of service was set as part of cutting cost strategy. 2-The owner ship of Gulf air: On 6 May 2007, the government of Bahrain claimed 100% ownership of the airline that mean that Gulf air owned by the government and all other owners dropped as we said above in history. -Economic conditions: In the latest years the global economic crisis which started mainly in 2007 affected the entire economy, it generally lead to a substantial inflation in the overall prices of goods and services especially the price of the oil, many large and small international companies collapsed as a result of the crisis and therefore lead to a huge unemployment. However, the Gulf Air as an international aviation company has been affected severely by the crisis and many loss es has occurred as a result. Since the beginning of the crisis people including business men reduced their use of the airlines in general, so demand of such service was affected, other factors like the increment of the oil price had a crucial affect on the gulf air until today. These factors were the main to cause the Gulf Air to reach a weak point, so in order to survive a new strategy has been put in sight which is based mainly on absorbing costs. This strategy is basically intending to narrow lines of services by excluding unprofitable lines and dismissing employees who are working behind those lines. And it has been demonstrated that at the last 5 months-before May 2010- the number of employees has been decreased from 5200 until 4700 which is considered the starting point of implementing the strategy, a continuous application for employees assessment in order to keep the efficient ones only has been adopted as a second step as well, in addition to planning to put a new strategy for early retirement. These things are part of what the Gulf Air is trying to do in order to recover from the occurring losses, aiming on reaching to the breakeven point within year 2012. -Reputation of the Gulf Air: The Gulf Air with the golden falcon had a rotated reputation during the sixty years of its life; many claimed that it has changed a lot from the eighties when it used to have remarkable and unique service and reached to a week level of reputation on many of its features compared to other rivals. Several factors affected positively and negatively on the reputation of the Gulf Air including: 1. Level of the service. Clients are considered the main component in the recipe of success of any service provider company, hence the Gulf Air has been trying to do its best o provide a comfortable and successful aviation service to its passengers, and to gain loyalty of some clients. One of the programs that was set is loyalty miles that enable the client to accumulate miles whenever he/ she travels using the Gulf Air, providing three levels of miles cards, the blue, silver, and golden which varies with the degree of loyalty of the client, the level of the service he/ she uses, and frequency of using the service. These miles will enable the client after having a good sum of miles to get free or discounted tickets and services. Other services provided by the Gulf Air including reservation of hotels and renting cars from one of its partners that are specialized in providing such services, where you can accumulate additional miles by using their services. An additional point is providing electronic service through its website, such as reserving airline tickets and other services through its specialized website, and specifying a table for discounted tickets and other services on the front page of the website, as well as providing any detailed information concerning the Gulf Air for its clients. Despite these good services that are in the hand of the Gulf Air, they have other drawbacks affecting the service and making them out of trend. For instance, many clients have spread their complaints on the website of the Gulf Air, they claimed that the service provided needs a lot of improvement starting with the hospitality and coordination of the fly attendants, and ending with providing entertaining services and safe environment abroad, as well as taking care of the tidiness of the airplanes toilets and seats. Many of the clients were complaining about the low level of service in the first class and its unsuitability to be related to that class. Other important fact that has been affecting the reputation of the Gulf Air service is having lots of delayed and canceled trips over its history. Statistics demonstrated that only in year 2008 the number of cancelled airplanes reached 661 trips, and about 5011 trips were delayed. Most of these numbers were caused by technical defects. That led us to the conclusion of the necessity of providing intensive concentration on the problem of technical defects. In addition the company should keep up with clients desires, by providing air planes that are occupied with the best technology of entertaining especially for long trips, as well as taking care of the tidiness and safety issues as they should be put as a top request. 2. Incident: 1) 23 Aug 2000: Gulf Air Flight 072 crashed into the Arab Gulf on approach to Bahrain International Airport from Cairo. The A320 with 143 passengers and crew on board approached the landing at higher speeds than normal and carried out an unusual low altitude orbit in an attempt to correct the approach. The orbit was unsuccessful and a go-around was attempted. While carrying out a turning climb the aircraft entered a descent at 15 degrees nose down. The aircrew did not respond to repeated GPWS warnings and approximately one minute after starting the go-around the aircraft disappeared from radar screens. There were no survivors. 36 children were on the aircraft. The accident investigation concluded that the primary cause of the crash was pilot error (including spatial disorientation), with a secondary factor being systemic organizational and oversight issues. Flight 072 was the the highest death toll of any accident involving an Airbus A320 at that time. 2) 23 Sep 1983: Gulf Air Flight 771 was a flight from Karachi, Pakistan to Qatar via Abu Dhabi. On that date, a bomb exploded in the baggage compartment. The plane crashed in the desert near Mina Jebel Ali between Abu Dhabi and Dubai in the UAE. All seven crew members and 105 passengers died. Most of the dead passengers were Pakistani nationals, many returning after spending the Eid ul-Adha holiday with their families in Pakistan ) Nov 12th 2009, hydraulics failure :The crew of a Gulf Air Airbus A320-200, registration A9C-AD performing flight GF-510 from Bahrain to Dubai reported a hydraulics failure while on approach to Dubai. The airplane landed safely on Dubais runway 12L and was able to vacate the runway. 4) Dec 20th 2008, engine fire before takeoff : A Gulf Air Airbus A321-200, registration A9C-ES performing flight GF65 from Mumbai (India) to Bahrain with 124 passengers and 9 crew, w as lined up on the departure runway waiting for takeoff, when the left engine caught fire. The crew initiated an immediate evacuation via slides. Fire services were able to quickly contain and extinguish the fire. Mumbais main runway was closed for 45 minutes until the airplane could be towed off the runway. Several arriving flights had to divert as a result. The flight was cancelled and the passengers were brought to hotels. | 5) Feb 6th 2006, open freight door indication: a Gulf Air A340-300, flight GF2 from London Heathrow to Bahrain, diverted to Istanbul after an indication, that one of the freight doors had opened. It was determined after the safe landing, that indication was faulty, and the plane continued its journey after about 90 minutes on ground. | 6) Maintenance Incident: Gulf Air A340 dropped engine| 7) Apr 10th 2010, rejected takeoff: A rejected takeoff from Bahrains runway 30R at high speed when the right hand engine burst into flames with a loud bang leaving debris and spilled fluids on the runway. The airplane came to a safe stop. An airport official reported, that the airport had to be closed for about 2. 5 hours until the runway was cleaned and the airplane was removed from the runway. After the engine blew up the crew rejected takeoff, activated the engine fire suppression system and alerted ATC before they evacuated. Emergency services responded and put out the fire. The runway received minor damage. Eight arriving flights needed to divert to Damman (Saudi Arabia), five flights diverted to Doha (Qatar) and one to Abu Dhabi (United Arab Emirates )departed the engine and were collected from the runway. 8) A Gulf Air Airbus A330-200, flight GF-57 from Mumbai (India) to Bahrain with 222 people on board, was about 30 minutes into the flight, when the crew returned to Mumbai due to a technical malfunction. The airplane landed safely about 60 minutes after departure, but needed to be towed off the runway. | 3. Competition: The main competition of Gulf Air are Bahrain Air , Emirates, Qatar airway, Air Arabia and Aljazeera airways Gulf Air With its fleet of around 30 aircraft Gulf Air remains by far the biggest carrier at the airport offering flights to 39 destinations in Africa, Asia and Europe as well as within the Middle East. Apart from London, Paris and Frankfurt, Gulf Air also operates European flights to Greece and Cyprus . The prices of Gulf Air: Now a day we see that there is reluctance to travel at this time of year compared to the years before. Because of the high prices, which included airline tickets that registered an increase ranging between 30 and 40%, that the airlines claim that this rise is due to the large increase in taxes and fuel prices. But in fact, that the increase in fuel and taxes has been happened years ago, so there is no justification for this increase, just that they want to compensate there loss. Most of people that they want to travel always compare between the prices of the airlines and if we compare between the Gulf Air prices and Aljazeera airways we see that there is deference between them. 5. Sponsors ships: Gulf Air sponsors events, of which the most prestigious is the Bahrain Grand Prix. This is usually the third race of the Formula One season and is held in March or April of each year. They have also recently become sponsors of the English football Championship side Queens Park Rangers F. C. Gulf Air also signed a sponsorship with the Oman national football team in 2006. 6. Social Responsibility. As it has been noticed over the years and especially over the last few years, the Gulf Air has been especially keen to be more socially responsible, by contributing in many events and concerns of the society. One of the most important concerns is it contribution in the process of reducing the amount of air pollution by reducing the amount of the oil. 5-Employees affairs. One of the reasons of the Gulf Air survival was its human force and its employees inside the company, therefore the Gulf Air has been trying its best to provide proper job environment and appropriate work conditions. Many financial incentives are being provided to the employees of the Gulf Air including annual free tickets, discounted tickets for the employee, his her spouse, kids and parents, health insurance, and discounted fee for the Gulf Air club, clinic and hotel. And when it comes to the salaries of the employees many employees consider it relatively moderate which reflects the tender care that the company provides for its employees. As an interview has been held with one of the employees from the IT department who carries a itle of IT infrastructure architect, he demonstrated that other departments of the company need to improve the coordination with their department, and the y should come to realize the essence of their department by changing the idea that the IT people are PC technicians and understanding how important is their department for exploiting the new technology for the benefit of each department and therefore the entire company. He claimed that either the department should ta ke a step toward this issue or the company itself in order to change the mentality of other employees toward the IT department. Another interview was held with the only e-marketing specialist in the Gulf Air who demonstrated that the Gulf Air is specifying a special budget for the sake of marketing of its services. There are several street banners were hanged in some targeted places, and e-marketing is being used effectively for promotion, by taking special care of the website of the company and its way of submitting the necessary information for clients, and by sending e-mails of the latest offers for specified people on a regular basis. She had several complaints as well concerning the coordination between the departments, she said that many significant information for their work is being received late by other departments, which affect the flow of their work and consequently affect the company as a whole. Both of the employees commented on the new strategy of the Gulf Air, and they expect good future results as the government as well as the employees are keener to lead the company to survival. They claimed that the company strategy of laying off surplus employees and submitting a new early retirement strategy are definitely for the benefit of the company even though it is not for the benefit of the employees. One of the most important issues concerning employees is the temporary contracts that have been used since 2005 by the company with its new employees. The employees carry contracts of a limited period that are renewed after a specified period such as two years. Many believe that it is a good way to release employees that are not of much use to the company, but from the employees point of view it makes a threat of unemployment for them and make them insecure. When looking at this issue it seems to be of good benefit from one side to the employees, as it will encourage them to work harder. A final issue is about the crew of the airplanes. It has been noticed lately that many complaints from clients are being submitted, many complain that the flyer attendants are not concerned about providing the service in an appropriate manner. Others claimed that they lack skills of customer service and safety. One of the facts that affect the attitudes of the crew is that most of the members of the staff are foreigners and they usually intend to take the experience from the Gulf Air and then resign to have better offers else where. This will definitely make them unconcerned about the reputation of the Gulf Air as they wont be regular employees, and therefore will not pay attention in acting in a responsible way. A good step in the new strategy is made, which is employing Bahraini staff and training them intensively. Bahraini employees may become more concerned about the company affairs as it is a company that its survival or termination will affect the economy of the country and therefore lives of many Bahraini people. Despite that previously occurred mistakes and negligence from employees might occur, therefore and intensive training should be accompanied with regular monitoring and assessment of the crew. Reports should be made for each member and therefore should be rewarded or punished in accordance to the attitude showed. The final out coming: Through our study of Gulf Air We conclude that its really in need of radical changes in infrastructure, despite its success in the past and its good reputation, but this thing does not help her now as several competitors are appeared, who offer for the travelers better service and even lower price than Gulf Air does. Conclusion The Gulf Air is a company that the survival of many employees is correlated with its survival. Therefore the government is being keen to provide its support to the company. And as a result a new strategy was made aiming with big hope to bring the company to the breakeven point within the year 2012. Everyone is looking forward to the future hoping that the new strategy will make a hit in the world of Bahraini aviation. And the question remains whether the company will be able to keep up with its rivals, and what the new strategies are if it is fated to the Gulf Air to reach the breakeven point. Age Under 18| 0| 18-25| 20| 25-35| 7| over 35| 3| Have you ever traveled using the Gulf air airlines? answer| Repetition| percentage| Yes| 29| 97%| No| 1| 3%| Total| 30| %100| How do you describe the trip? answer| Repetition| percentage| Bad| 3| 10%| Not bad| 5| 17%| Good| 15| 52%| Very comfortable| 6| 21%| Total| 29| %100| To which country (ies) was your trip(s)? answer| Repetition| percentage| Kuwait| 35| 28%| UAE| 24| 19. 2%| KSA-Makka| 6| 4. 8%| Iran | 5| 4%| Jordan | 5| 4%| India| 6| 4. 8%| Egypt | 4| 3. 2%| Thailand | 6| 4. 8%| Qatar| 34| 27. 2%| Total| 125| %100| Was seat reservation for trips easy? answer| Repetition| percentage| Yes| 26| 90%| No| 3| 10%| Total| 29| %100| How can you describe the trip? Answer| Repetition| percentage| Cheep| 0| 0%| Moderate | 17| 59%| Expensive| 12| 41%| Total| 29| %100| Have you faced any problems in your trip(s) nswer| Repetition| percentage| Yes| 10| 34%| No| 19| 66%| Total| 29| %100| Was any of the trips delayed or cancelled? answer| Repetition| percentage| Yes| 15| 52%| No| 14| 48%| Total| 29| %100| Will you use the Gulf air for other trips? answer| Repetition| percentage| Yes| 25| 86%| No| 4| 14%| Total| 29| %100| How do you describe the cabin attendants of the Gulf air? Answer| Repetition| percentage| Cooperative| 12| 42%| Well trained | 11| 38%| Impolite| 3| 10%| Lack training| 3| 10%| Total | 29| %100| How generally do you describe the service of the Gulf air? Answer| Repetition| percentage| Bad| 2| 7%| Not too bad| 11| 38%| Good| 14| 48%| Excellent| 2| 7%| Total | 29| %100| Recommendations: 65. 5% of the people say in their recommendations that they want from Gulf Air to reduce the prices of their tickets it not that expensive but when you compare it with other companies and the services they provide you will see that it is expensive. And the other 34. 5% recommendations are to make more trips to other countries and the must change some of their air plans also change the seats. and they must have more Bahraini employees in the cabin.