Classifieds powered by Gulf News

Gulf Air restructures fleet orders to save $2.5 billion

Company says move necessary in light of the tough economic conditions

Gulf News

Manama: Gulf Air has restructured its fleet orders with Boeing and Airbus in a move that will reduce its long-term liability and meet its future strategic needs.

The company said that it has signed amendment agreements with Airbus and Boeing to change its original orders.

The accord that will allow Gulf Air to save around $2.5 billion (Dh9.19 billion) was reached with both aircraft manufacturers, the company’s two key suppliers of wide-body and narrow-body aircraft, following extensive negotiations.

In 2011, the company engaged in extensive discussions with both manufactures to renegotiate its orderbook.

According to Gulf Air, the move had become “necessary in light of the tough economic conditions faced by the global aviation industry, including high fuel prices and a slump in air traffic as well as the regional developments over the last 15 months, resulting in the forced suspension of a number of destinations impacting revenue.”

The revised agreement with Airbus allows the conversion of the existing wide-body obligation into eight A320ceo Family aircraft, all of which will have to be delivered by year-end, and up to 16 A320neo Family aircraft slated to join the airline’s fleet as replacement and/or growth for the current single-aisle fleet later in the decade, the company said.

The revised Boeing agreement allows the airline to reduce its wide-body 787s Dreamliner requirement to between 12 and 16 aircraft, depending on Gulf Air’s strategic requirements. The aircraft are scheduled for delivery towards the end of the decade and they will replace Gulf Air’s current wide-body fleet.

“As long-standing trade partners, Airbus and Boeing have understood our challenges and I am delighted that we have arrived at mutually agreeable solutions inline with the government’s directive to put the airline firmly on a path towards sustainability,”

Samer Majali, Gulf Air CEO, said, “The revised orders reduce our long-term financial liability of approximately $5 billion by over 50 per cent and the remaining liability more effectively meets Gulf Air’s future fleet replacement and/or growth requirement.”

Marty Bentrott, Boeing Commercial Airplanes’ vice-president of sales for the Middle East, Russia and Central Asia said that they appreciated the fact that as a commercial airline Gulf Air had to respond to the changing global aviation environment.

“The revised fleet requirement from Gulf Air reflects this and we are glad to have cooperated with Gulf Air to arrive at an amicable solution. Gulf Air remains a valued customer of the Boeing 787 Dreamliner and we look forward to continuing our strong partnership,” he said.