Gulf Air gets $238m cash lifeline
Gulf Air's directors have okayed the airline's three-year recovery plan by injecting BD90 million ($238.7 million) in cash.Chairman Shaikh Hamdan bin Mubarak Al Nahyan said the financing will be shared equally by member states - Bahrain, UAE and Oman - and will be paid out in two installments. The cash injection will help to finance changes in Gulf Air's operating strategy and is aimed at improving cost and efficiency and returning the airline to profitability. "Our discussions focused on the three-year recovery plan and on enhancing the airline's capital," Shaikh Hamdan said after the meeting at Bahrain's Le Royal Meridien Hotel. "The board has agreed on the plan and also agreed to inject BD45 million into the airline this year and another BD45 million before the end of next year." Shaikh Hamdan said the board is still considering Qatar's decision to withdraw from Gulf Air. "We are studying the legality of the matter," he said. Shaikh Hamdan said that he is confident of the recovery plan. "The plan, which is one of the most comprehensive the airline has ever undertaken, has been the subject of long, careful and thorough examination, representing as it does, a major change in direction for Gulf Air. "It will establish the airline as a commercial operation, competing on the world stage," he said. "We have no doubt whatsoever that the ingredients are all there and that they will allow us to succeed and reinstate Gulf Air in its rightful place as one of the world's leading airlines. "At the heart of everything we do from now on will be the provision of superior services for our passengers every time and everywhere they travel in the Gulf Air network." The plan was initiated by president and chief executive James Hogan earlier this year. Hogan said the outlook for the airline is positive. "It's good news for Gulf Air and we're back in business." he said. The BD90 million "yes" to Gulf Air's recovery plan means new destinations, new planes and a global marketing drive to win back customers. The airline currently has debts of $700 million (BD264m), lost BD52.2 million last year and is expected to lose BD42 million this year. But it is expected to break even in 2004 and be back in profit 2005, said vice-president of finance Ahmed Al Hammadi.