Gulf Air pursues long haul expansion with new routes to Kuala Lumpur, Singapore and New York; targets corporate and premium leisure markets

Gulf Air is planning to more than double the size of its long-haul network over the next year as it takes delivery of four additional 787-9s. New York is poised to become its longest route and first destination in the Americas while Kuala Lumpur and Singapore will supplement its only two existing long-haul routes, Bangkok and Manila.

Highlights:

• Gulf Air is planning to launch services to Kuala Lumpur, Singapore and New York as four additional 787-9s are delivered;
• The Bahrain-based airline is also planning to launch two to three new destinations in Europe;
• Gulf Air is targeting the corporate and upmarket leisure segments as it expands its network, which currently only includes two destinations in East Asia and none in the Americas.

Gulf Air is primarily focused on short and medium haul services within the Europe, Middle East and North Africa (MENA) region as well as to South Asia. Bangkok and Manila are its only two destinations in East Asia.

Manila is around a nine-hour flight from Bahrain while Bangkok is slightly less than seven hours. Bangkok by some definitions would also be medium haul and it is about the same length as Gulf Air's longest routes to Europe (London and Paris) and Africa (Casablanca).

South Asia, which accounts for 17 of its 49 international destinations, is three to five hours from Bahrain. Gulf Air also has 14 regional destinations within the Middle East, 10 in Europe (four in Western Europe and six in Eastern Europe) and six in Africa, based on OAG schedule data for the week commencing 1-Jul-2019.

GRAPH - Gulf Air has only 17 departures per week with a scheduled block time of over eight hours, representing less than 2% of total departures, and does not have any flights over 10 hoursSource: CAPA - Centre for Aviation & OAG.

Gulf Air CEO Kresimir Kucko told CAPA TV in an interview on the sidelines of the CAPA CEOs in Seoul Summit that the airline is looking at launching Kuala Lumpur and Singapore by the end of 2019 followed by New York and two to three not yet decided European destinations in 2020.

The new European routes will be operated with narrowbody aircraft, possibly A321neoLRs which Gulf Air is slated to start taking in 1Q2020. Geneva, an attractive business destination, is a target and ideal for the A321neoLR given the aircraft will be configured with 16 lie flat business class seats (along with 152 economy seats).

Kuala Lumpur, Singapore and New York would be operated with 787-9s. Gulf Air currently operates six 787-9s, which it took delivery of in 2018 and 1H2019, and plans to receive one more in 2H2019 followed by another three in 2020. Mr Kucko said the four additional 787-9s are considered growth aircraft while the original batch of six 787-9s were considered replacements for six A330-200s although Gulf Air continues for now to use some A330-200s to provide supplemental capacity on other routes.

"We plan, if possible next year, to open the New York route and also at the same time this year in the east we would like to open Kuala Lumpur and Singapore," Mr Kucko said. "We are in the final stage of evaluating these routes. This will be for the future growth."

Kuala Lumpur, Singapore and New York would provide a new nonstop option for passengers heading between these three major cities and Bahrain. Singapore and New York particularly should be welcome additions for corporates given the high concentration of business traffic in these markets.

Gulf Air has used the 787-9 to improve its premium product, providing 26 lie flat business seats and a revamped business class product along with 256 economy seats. Mr Kucko claims its new Falcon Gold business class service "offers a first class experience by industry standards".

Corporates will also gain a new option in several one-stop markets once Gulf Air begins serving Kuala Lumpur, Singapore and New York. From Kuala Lumpur and Singapore the focus will likely be on Europe and, to a lesser extent, connections within the Middle East. From New York the focus will likely be on South Asia and regional connections within the Middle East.

Gulf Air now relies heavily on sixth freedom traffic in the Bangkok and Manila markets and overall around 50% of its traffic is transit. It expects the transit ratio to increase as it expands given the small size of the local Bahrain market.

The airline last year adopted a new strategy aimed at the corporate and upmarket leisure segments in both the local and sixth freedom markets. Gulf Air plans to move into a new terminal at Bahrain International Airport later this year that should help the airline attract more premium connecting traffic.

Mr Kucko pointed out the Bahrain hub offers a more seamless transit experience and much shorter walks between gates compared to the region's meg hubs. He promises "a very attractive new business class lounge".

HEAR MORE... Gulf Air CEO Kresimir Kucko discusses the airline's new strategy and boutique airline model and how it has more of a focus on the premium end of the market in an exclusive CAPA TV interview recorded on the sidelines of the CAPA Airline CEOs in Seoul Summit in Seoul, South Korea in early Jun-2019.