Gulf Air reveals massive expansion plan

Gulf Air is injecting $900 million into the business by acquiring nine up-to-date aircraft

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By  Barbara Cockburn Published  June 1, 2006

Gulf Air announced that it was to invest $900 million in the business at the Arab Travel market exhibition, held in Dubai last month. Karan Srinivasan, a Gulf Air spokesman and media editor, said the airline was in negotiations with Boeing and Airbus to acquire the new fleet and a decision would be made in the next three months. “The new fleet will replace some of our existing aircraft. Gulf Air currently has ten A320, six A330, nine A340 and nine B767-300s. The deal will allow us to become more competitive and provide our customers with added services,” he said. The services include Gulf Air’s famous ‘sky nanny’ service and a ‘five-star restaurant in the sky’ which will both be operational in the new aircraft. Apart from updating its fleet, the investment will allow Gulf Air to increase its international routes. Recently the carrier added Pakistan and Islamabad to its list of destinations and increased its flights to Muscat and London by more than double. The airline previously ran seven flights a week to both destinations, but now provides 13 flights a week. Gulf Air also reported last month improvements in its major key performance indicators in the first quarter of 2006, as the airline’s two-hub strategy took effect. During the first three months of the year, the airline’s seat factor increased to 73%, reflecting a 6.3% increase in premium passengers and a string increase in Haj traffic. Unit revenue for the same period rose by 6.6% over 2005. Further news follows Gulf Air and Philippine Airlines entering into an historic partnership following the forming of a code-sharing arrangement on selected routes to the Middle East and other destinations. The partnership was announced in a joint press conference conducted by Gulf Air president and chief executive James Hogan and PAL President and chief operating officer Jaime Bautista at the Shangri-La Hotel, Makati. Under the code-sharing arrangement, PAL can sell tickets using the flight designator or flight number of Gulf Air to certain destinations in the Middle East where it does not fly to, but which are being currently served by Gulf Air. As part of the agreement, Gulf Air will allocate a certain number of seats in its flights for PAL passengers bound for Bahrain, Oman and other countries where PAL does not fly. Hogan said: “Code-sharing arrangements offer significant economic and consumer benefits. They give passengers price and service options.” The agreement will enable Philippine Airlines to code-share on Gulf Air’s Bahrain-Manila-Bahrain and Muscat- Manila-Muscat sectors with Gulf Air operating six flights a week between Bahrain and Manila and one flight per week between Bahrain to Manila via Muscat. Gulf Air already has code-sharing agreements with American Airlines, Thai Airways, the UK’s BMI and Cyprus Airways among others.

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