Gulf Air's 'Way Forward' strategy

Dubai: Gulf Air, the struggling Bahraini carrier, said it has developed a 'Way Forward' strategy that calls for a fleet modernisation of up to 35 new aircraft, an IPO and potentially a partnership with another airline.

Since it revealed it was losing $1 million a day earlier this year, the airline has cut loss-making routes and hired an acting president and chief executive, Bjorn Naf. The airline said it has reduced its daily losses by 30 per cent.

During a briefing at the Dubai Airshow on Tuesday, Naf said the airline needed to begin replacing its ageing fleet and would decide in coming weeks whether it would purchase or lease new planes.

He did not specify which airframe manufacturer Gulf Air would choose but said the order could be a mix of narrow body and wide-bodied airplanes. The new business plan calls for Gulf Air's fleet to increase to 45 to 50 around 2013. Recently, Gulf Air took delivery of two leased Boeing 737-800s to its network.

Once a turnaround is complete, Gulf Air will consider an initial public offering in 2008 or 2009 to raise cash for new aircraft and its route expansion, according to its chairman, Mahmood Hashim Al Kooheji.

Despite a year of management shakeups, the chairman said the team was now in a solid position to build on Gulf Air's longstanding reputation, and said the company was finally on sound footing to achieve its recovery plans.

"In three to four months we will be fully staffed, and I'm absolutely confident in this airline," Al Kooheji said. "We've been the airline of choice for the region and I'm sure we can build on that."