Gulf Air has shelved plans to introduce regional jets in the near future following a detailed assessment of the market.
The airline's commercial and strategic division has spent a year analysing the economics of regional jet operations and the potential impact on the carrier's operations.
The addition of high-frequency services within the Gulf using regional jets has been a key departure from previous strategies under evaluation by chief executive James Hogan, who was appointed in 2002 to oversee the restructuring of Gulf Air.
Until recently he had forecast a requirement for up to 15 regional jets, with the 70-seat Bombardier CRJ700 and Embraer 170 seen as the frontrunners, but the smallest offerings from Airbus and Boeing also being considered.
In an advisory to manufacturers with which it had been in discussions, Gulf Air says the market is volatile and it should put off the acquisition of smaller types to a later date.
"The result of such extensive analysis reveals the level of risk and costs proposed by this project make it financially unattractive in the short term," says the carrier. "In the context of the regional aviation market - which is characterised by aggressive airline expansion and the introduction of new entrants - it is likely that the financial risks will outweigh the benefits."
The airline says it has decided the "implementation of smaller aircraft should be deferred till a more expedient time", but adds that "there are clearly benefits from a network and customer service point of view. It is our intention to re-evaluate the smaller aircraft/high-frequency strategy on an ongoing basis as the Gulf aviation markets mature."
DAVID KAMINSKI-MORROW / LONDON
Source: Flight International
