Gulf Air to decide on plane orders by year end
Sun Oct 25, 2009
DOHA, Oct 25 (Reuters) - Bahrain's Gulf Air is in talks with Airbus and Boeing over its plane orders and expects to make a decision by year-end, the airline's chief executive said on Sunday.
The struggling airline, which is fully owned by Bahrain's sovereign wealth fund Mumtalakat, has 35 Airbus and 24 Boeing airplanes on order, but said in August it was reviewing its orders as the loss-making airline restructures.
"We are constantly in talks with the manufacturers to choose the plane and the number of planes that best suits Gulf Air," chief executive Samer Majali told reporters at an aviation conference in Doha.
When asked when the airline would make a decision, Majali said: "In the next few weeks, next few months ... but definitely towards the end of the year."
Majali did not say whether the review with Airbus and Boeing would lead to reduction in planes or a new timeframe for delivery.
The airline has seen three chief executives attempt to turn its loss-making operations around since 2002, cutting jobs and realigning its network as previous shareholders Abu Dhabi, Qatar and Oman gave up their stakes in the ailing carrier.
In 2007, the airline cut jobs and trimmed its network after reporting losses of more than $1 million a day.
It is also facing stiff competition from other Gulf Arab airlines, among the fastest growing in the world, with Dubai-based Emirates [EMAIR.UL], Qatar Airways and Abu Dhabi's Etihad Airways pouring billions of dollars into new aircraft orders as they looked to establish themselves as hubs between East and West.
Low-cost airlines including Air Arabia AIRA.DU and Jazeera Airways have also arrived on the scene.
Majali said from this October until April 2010 it would be phasing in 10 new Airbus A320s and removing five old Airbus from its fleet.
A union official at Gulf Air said on Oct 22 it is calling on members and employees of the carrier to start a labour action on Nov 5. to protest against pay rises for senior management amid planned lay-offs.
Any escalation in the conflict between management and unions could burden the restructuring process under the new executive Majali.
Unions have said Gulf Air plans to lay off 272 employees by the end of the year, with management saying it only planned to cut positions through natural attrition and fire employees for misconduct.
"We haven't done anything about restructuring yet," Majali said. "They had one demand related to working hours and said it wasn't the time. They actually had three demands. Once has been accepted, one under review and the third we said no, it's not time to reduce work hours and they decided to go to the press." (Writing by John Irish; Editing by Mike Nesbit)
Source:
Reuters