Bahrain state carrier Gulf Air said it was close to a deal to switch plane orders to narrow body aircraft as part of its strategy to refocus as a niche regional carrier.
Cancelling orders for wide bodied planes such as Boeing’s 787 or Airbus’s A330 would be a blow to manufacturers desperate to boost sales of bigger aircraft.
With a slowed market, Boeing and Airbus have become more reliant on sales of single aisle planes, which sell for far less than their biggest models and offer thinner margins, especially when sold in bulk.
Gulf Air chief executive Samer Majali said the airline was not looking to reduce the overall number of planes on order.
In an interview with Reuters on Wednesday, he said: “The agreement that we’re working on is maintaining the size, but changing the make up, the composition, and changing the timing.”
He added: “We’re close to an agreement, we’re not there yet.”
Gulf Air, which flew close to 6 million passengers last year, has 24 Boeing 787s on order, as well as seven Airbus A320s and 20 Airbus A330s.
Majali said that Gulf Air is trying to hasten deliveries of narrow body planes while delaying those of wide body planes.
Bahrain is a small oil producer and cannot afford to plough vast funds into its airline like its Gulf neighbours, where Qatar Airways and Emirates Airlines have large fleet expansion programs to link Asia and Europe.
Gulf Air is trying to find a niche by building up a network of regional routes to destinations it sees as underserved such as Basra in Iraq and Isfahan in Iran, for which it needs regional jets.
Any cancellation of A330s could hurt engine maker Rolls Royce, with which Gulf Air signed a $1.5 billion deal in 2008 to supply engines for the planes.
Gulf Air posted a loss of $502 million in 2009, according to a document seen by Reuters, and Majali said the airline plans to break even in “two to three years”.
Bahrain has plans to privatise its state owned companies, and Gulf Air could be put on the auction bloc once it is more attractive to investors. (Reuters)
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