Bahrain lures Asian airlines in its bid to double capacity

20/01/2014 10:06 AST

Bahrain Airports Company (BAC) said it is in talks with Asian airlines as it seeks to attract more services to a hub that's undergoing a $980 million upgrade aimed at doubling capacity to 13.5 million passengers over five years.

BAC is targeting half a dozen carriers from China, India, Indonesia, the Philippines, Malaysia and Singapore with 'aggressive incentives,' Mohamed Yousif Al Binfalah, chief executive officer, said on Saturday in an interview. The state-owned company expects to boost passenger numbers 6 per cent in 2014 from last year's 7.4 million.

Bahrain is touting for business after losing out to Dubai, Abu Dhabi and Qatar in the competition for major hub status after national carrier Gulf Air grew at a slower pace than local rivals, leading to losses that resulted in job and route cuts.

Terminal-expansion work at Bahrain International Airport should begin at the end of this year following a tender for construction contracts in the third quarter, Al Binfalah said.

"The fundamental market is there; to us it's a matter of who picks up business in the market, whether it's Gulf Air or regional carriers who have increased frequency to Bahrain," he said at the Bahrain Air Show.

While the airport may not have access to the millions of customers lured by Dubai-based Emirates, the world's biggest international carrier, it serves as a gateway to Saudi Arabia, the biggest Gulf economy, and is integrated with Bahrain's Khalifa bin Salman port, he said.

Dubai International Airport said it was set to surpass its forecast of 65.4 million passengers for in the year 2013.

Tired asset

Still, the airport is now a 'tired asset', Al Binfalah said, designed with a capacity of 4 million passengers - barely half 2013's total - and last upgraded in 1994.

The government plans to invest $80 million on addressing the most urgent needs involving security, safety and maintenance, with $900 million earmarked for terminal expansion. BAC signed a total of $7 million in contracts for upgrades during the Bahrain Air Show, Al Binfalah said.

Plans for a new airport will be reviewed in five to 10 years depending on passenger numbers and may involve expansion of the existing site or construction at a new site, he said.

Bahrain International is currently served by 23 passenger airlines and 11 cargo carriers, providing 724 flights a week to 41 destinations, with Gulf Air comprising 60 percent of traffic.

"There is a market in Bahrain, despite the decrease in traffic in the last two years," Al Binfalah said.

"We expect Gulf Air to start picking up with either the development of new destinations or increasing frequencies."

BAC plans to hold talks with Gulf Air about extra flights to under-served cities. Asian markets are where the greatest potential lies, he said, with 53 per cent of Bahrain residents being expatriates and almost half of them coming from India. The airport also aims to boost retail and engineering revenue.

The airport is targeting business travellers, passengers seeking flights to eastern Saudi Arabia, and tourists to Muslim religious sites in Saudi Arabia, Iraq and Iran, Al Binfalah said.

Bloomberg