Gulf Air must expand or risk being smothered: chief executive

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Gulf Air insists an aggressive fleet-expansion programme is central to defending its position in the rapidly developing region against other dominant carriers.

The Bahrain-based operator, under the short-lived management term of Andre Dose, last year opted for a programme of aircraft reduction and route cuts to stem heavy losses.

But new chief executive Bjorn Naf is certain the traffic demand justifies adopting an opposite approach, based on re-establishing and reinforcing Gulf Air's Bahraini network and investing in the replacement and expansion of its fleet.

"There's a huge boom in tourism, and it's a financial hub," said Naf at the International Air Transport Association annual general meeting in Istanbul. "Can you go against the stream? I don't think so."

Gulf Air, which has 25 aircraft, ordered up to 24 Boeing 787s and has just opted to take another 20 Airbus A330s and 15 A320s. Around half of these will be to replace current aircraft, the other half will be used for growth.

"If you shrink and downsize, you'll be eaten alive by others. Emirates, Qatar Airways - if we don't do anything, they'll come and eat from our cake," says Naf. "In the long term, the airline industry will grow. You have to be part of the game, it's as simple as that."

He believes Bahrain can adopt a classic hub-and-spoke model, enabling long-haul connections to bypass European hubs to reach regional destinations.

"The weakness of the previous strategy was that it focused on local traffic," says Naf. "Only 25% of our traffic is local. We can't survive on that. We have to connect Bahrain to the world."

Gulf Air primarily serves the Middle East, the Indian subcontinent and Asia, with a handful of destinations in Europe and codeshare partnerships to North America. It has a small presence in Africa Naf says this is largely due to a lack of capacity to test "risky" destinations.

But he adds that the airline has listed 73 potential cities to serve and expects, on average, to bring in three new aircraft and add three destinations a year.