Reshaped Gulf Air cuts into first-quarter losses

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Middle Eastern carrier Gulf Air has halved its first-quarter losses under the restructuring programme which has cut its fleet to 26 jets.

The carrier attributes the improvement mainly to a 21% drop in expenses, and "better than planned" revenue performance - arising from higher sales in Bahrain - following changes to its network.

Over the first quarter Gulf Air's competitive environment changed with the collapse of Bahrain Air during early February.

But Gulf Air also says that it managed to reduce leasing charges and, through a lower headcount, cut staff expenditure.

It has shut loss-making routes across its network but says it is discussing more frequencies on specific routes which, it believes, are underserved.

The airline adds that it has been conducting "exhaustive negotiations" to return excess aircraft to lessors, and has reduced its fleet to an all-Airbus operation comprising 20 A320-family and six A330 jets.

Four A330s will be retrofitted with flat-bed seats, a refurbished economy cabin and upgraded in-flight entertainment systems by the end of summer 2014. These aircraft will be used mainly on the London and Bangkok routes.

"Tough decisions taken over the past three months by the [directors] have started to yield positive results, with the foundations firmly laid to put Gulf Air on a path towards long-term sustainability," says the carrier. It cautions that the remaining nine months of the year will be "challenging".