Gulf Air managers will this month tell the board how they plan to grow the airline's fleet from 35 to as many as 60 aircraft by 2010. The expansion will include widebody replacements for its nine Boeing 767s and probably the airline's first regional jets.

The airline - owned by the Abu Dhabi, Bahrain and Oman governments - is halfway through a three-year strategy to stem crippling losses and says it will break even this year. This is despite a fiercely competitive market that has seen the birth of several new players in the past 18 months. These include Etihad, owned by the government of Abu Dhabi.

In a speech to the Aviation Club in London last week, Gulf Air chief executive James Hogan delivered a thinly veiled attack on his regional rivals, many of which are heavily subsidised by their governments. He warned that new European Commission rules that open the way to "protection against subsidisation and unfair pricing causing injury" to EU carriers could hit Arab airlines. "Those that are perceived by the EC to rely on state aid, direct or indirect, face investigation and penalty," he said.

Gulf Air has itself been heavily bankrolled by its shareholders, although it is now entirely self-financing. Emirates too operates without a state subsidy. Hogan added: "Our mandate is to bring the airline back into long-term sustainable profitability, on a strictly commercial basis. We receive no direct or indirect state aid, nor will we in future."

Hogan - brought in to turn the 54-year-old airline around - says Gulf Air will continue to focus on its Middle Eastern and Indian subcontinent routes and has no ambitions to "become a global airline". However, he says Gulf Air is keen to join an alliance - it would be the first in the region to do so - and, after that, establish direct flights to USA, beginning with its partner's hub. Gulf Air currently codeshares with American Airlines. "We have been in talks with all three [alliances] for 18 months," he adds.

Qatar Airways has revealed passenger numbers grew in its 2003/4 financial year by 35% to 3.3 million. It is forecasting it will carry 4.5 million passengers in the 2004/2005 financial year. Passenger sales revenue rose by 47% during the period and cargo revenue by 73%.


Source: Flight International