Investment plan includes fleet renewal and refurbishment
Gulf Air is nearing a fleet-renewal agreement that will involve the replacement of its Boeing 767 fleet as part of a wider strategic plan that also includes recapitalising the carrier.
The Middle East carrier revealed parts of the new three-year plan last week after the carrier’s new board – reorganised following the withdrawal of one-third shareholder the Abu Dhabi government – endorsed the plan at a meeting in Muscat, Oman.
Bahrain and Oman each hold 50% of Gulf Air and the representatives from each state on the board have agreed to recapitalise the airline, although the extent and mechanism have yet to be disclosed. “This will be subject to final sign-off by each government,” says the airline.
The strategic programme, entitled Smart Airline, Successful Business, also covers renewal of its fleet as well as investment in aircraft refurbishment and product upgrades. “These funding decisions mean we can invest in new aircraft and other infrastructure to take this airline forward,” chief executive James Hogan says.
Gulf Air has a fleet of nine 767-300ERs and some are used on the all-economy Gulf Traveller operation. But the airline has signalled a desire to replace the type and simplify its overall fleet.
The airline adds that it is in negotiations with the major manufacturers to finalise terms for the acquisition of the replacement aircraft, and “we hope to sign a memorandum of understanding to this effect in the near future”.
Gulf Air has not indicated the type of aircraft it might introduce. Alongside the 767s the carrier uses Airbus A320s, A330s and A340s.
The decision by Abu Dhabi last year to withdraw, to concentrate on its own carrier Etihad Airways, forced Gulf Air to respond by introducing a “two-hub” strategy that focuses its operations on Bahrain and Muscat. As a result, passenger numbers at its main bases effectively stayed static last year.
Figures from Gulf Air show that passenger increases at Bahrain and Muscat barely offset a sharp decline at Abu Dhabi. Total passenger numbers for the airline across the three airports reached 8.1 million, only marginally above the previous year’s figure.
Hogan says that competition remains strong and that 2006 will be “another tough year”. But he adds that the carrier expects strong growth at Bahrain and Muscat, stating: “We have the clarity of focus and shareholder support to continue to build this business for the long term.”
Source: Flight International
