PUKmedia    14-04-2010    11:04:31

Summary

Moving into Iraq was risky, but Gulf Air has managed to overcome the political hurdles and use its Bahrain base to cement its presence in Iraq for years to come.

Analysis

Gulf Air’s recipe for success and growth in Iraq is not down to moving first into the country – the real captivating factor in all the benefit the airline has seen is largely down to demographics.

Bahrain is predominantly Shia Muslim country, despite being ruled by the Sunni Muslim monarchy. Like Bahrain, Iraq too is predominantly Shia Muslim and home to countless religious sites whose visitation under the Saddam Hussain-led regime was suppressed.

Shia Bahrainis and all who have family, cultural, business and economic links to Iraq are taking advantage of the somewhat improving security there to venture where they could never have once dreamed.

Gulf Air has done nothing out of the ordinary except provide air services while demand seems to be inelastic – this trend is unlikely to change. Serving Baghdad, Basra, Najaf and Erbil are the key cornerstones to making sure that operational success can be garnered – while European airlines may not ply their trade outside of Baghdad, both Gulf Air and incumbent Iraqi Airways will benefit by being able to transfer passenger’s in/out/around the country.

Gulf Air at present serves three of those four strategic hubs and will build on its customer loyalty simply because it was the first to meet the demand in the country.

If the security climate in Iraq stabilizes further, it is inevitable that we’ll see low cost airlines like NAS Air, Jazeera Airways, Wataniya Airways, Air Arabia, FlyDubai and others step in to capture a slice of this year-round, high demand market that has been chronically undersupplied for over two decades.

-glgroup.com-