Gulf Air axes A330 order in favour of A320 and A320neo

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Middle Eastern carrier Gulf Air is cancelling its order for 20 Airbus A330s in favour of taking up to 16 Airbus A320neos and eight baseline A320s.

It has also set out a requirement for 12-16 Boeing 787s to meet its long-haul needs.

The airline has been involved in drawn-out negotiations with Airbus and Boeing following the development of a broad restructuring plan which focuses on regional connections.

Gulf Air says it has "signed amendment agreements" with both airframers.

Its A330-300 order was originally placed in 2008. But the airline's revised strategy, implemented after chief executive Samer Majali took over, moves the Bahrain-based carrier towards a network and fleet based on high-frequency regional connections.

Under the new deal with Airbus the carrier will axe the A330 order and instead take delivery of eight A320s - all of which must be delivered by the end of this year.

It will also acquire up to 16 A320neo twinjets to replace and expand the single-aisle fleet towards the end of the decade.

Airbus has been holding an extensive A330-300 cancellation, for 14 aircraft, on its books for several weeks, but had not identified the customer.

Gulf Air had already cut its 787 orders to 16 but the new agreement indicates that this could be reduced further, to a dozen aircraft.

The 787s will arrive "towards the end of the decade", says the carrier, and replace its widebodies. Gulf Air conducts long-haul operations with a mix of Airbus A330s and A340s.

Majali says the revision more than halves the loss-making carrier's long-term financial liability, which had stood at some $5 billion, while the order change "more effectively" meets Gulf Air's requirements.