Debt ridden Gulf Air launches all-economy subsidiary
The troubled Bahrain-based Gulf Air plans to launch a new airline brand that will operate as the region’s first full-service, all-economy class carrier. Scheduled to make its inaugural flight in June 2003, the subsidiary airline will complement Gulf Air’s mainline offerings, by targeting holidaymakers and expatriate workers arriving to the Gulf Cooperation Council (GCC) region.
Over the short to medium term Gulf Air’s new leisure operation will be served by an existing fleet of nine Boeing 767-300ER wide-bodied jets, which will be reconfigured into an all-economy cabin.
Based in Abu-Dhabi, in the United Arab Emirates (UAE), the establishment of the new airline is part of Gulf Air’s efforts to return to profitability under the airline’s three-year strategic recovery plan, approved last month by Gulf Air’s Board of Directors. The airline's current $700 million debt is scheduled for repayment by 2013.
In addition to a cash injection of $238 million for this year and the continued deferral of government debt, the plan features a brand development initiative and the reconstruction of the airline’s fleet, network, alliances and customer service, with a strong focus on profitability and cost structure improvements.
The airline’s management also announced that negotiations are currently held with airframe manufactures Airbus and Boeing in a bid to meet Gulf Air’s mainline service aircraft requirements for the next decade.
Founded in 1950, Gulf Air is owned by Bahrain, Oman and the UAE. The airline’s fourth partner, Qatar, had announced last July its decision to pull out. The airline’s network stretches from Europe to Asia and covers 43 cities in 32 countries. The fleet is one of the most modern in the Middle East and comprises 33 aircraft. The airline plans to expand its fleet to over 60 by 2009. The company expects 42 million Bahraini Dinar ($111.4 million) losses in 2002. — (menareport.com)
© 2003 Mena Report (www.menareport.com)