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Tue 23 Oct 2007 01:24 PM

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Gulf Air in $929mn expansion

Investment in new aircraft could be start of turnaround in fortunes of troubled Bahraini carrier.

Troubled Bahraini carrier Gulf Air is set to spend 350 million Bahraini dinars ($929 million) on new aircraft as it looks to expand its fleet and bounce back from its current crisis.

The airline is looking to plane makers Boeing and Airbus as it aims to boost its fleet from 36 to up to 50 over the next 10 to 15 years in a bid to become "the region's carrier of choice", Bahrain’s Gulf Daily News reported on Tuesday.

It is expected to place the million-dollar order for new wide-bodied jets at next month’s Dubai Airshow 2007. The airline has already decided to lease two new Boeing 737s.

The move could be the start of a turnaround from the airline, which has been stricken with financial and managerial problems over the last year.

In April the airline admitted to losses of around $1 million per day and subsequently embarked on an $825 million restructuring programme, including destination, fleet and employee cutbacks.

However, the turnaround suffered a setback in July when Chief Executive Andre Dose quit after just four months in charge, the second CEO to go within a year.

In the latest scandal to hit the airline, an executive and eight employees were earlier this month probed by police on suspicion of misappropriation of funds, part of the Bahrain government's ongoing corruption crackdown.

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