Gulf Air returned to profit for the first time since 1997, posting a 2004 net profit of $4 million on Monday compared with a loss of $52.8 million the previous year. The Bahrain-based airline said the strong results exceeded its targets despite high fuel prices and regional competition, but warned that fuel prices may erode profits in 2005.
The airline said last year it hoped to break even in 2004 and return to profit by 2005, after years of losses. Gulf Air said revenue in 2004 reached $1.3 billion, up from $1.02 billion.
"Despite an exceptionally difficult operating environment, in which fuel prices mean a $80 million over-budget cost to the business, we are proud to report the best financial results at Gulf Air since 1997," President and Chief Executive James Hogan said.Hogan said Gulf Air would continue to try to tackle the problem of high fuel prices as it had last year.
"If unaddressed, (fuel prices) have the potential to erode the progress we have made to date," he added.
Vice President Finance Ahmed al-Hammadi told reporters that Gulf Air had forecast a net loss of 19 million dinars for 2005 due to fuel prices. But other officials said that projection was based on previous budget assessments which had been scrapped.
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