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Mon 22 Aug 2011 02:29 PM

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Gulf Air set to add routes to Europe, Middle East

State carrier will add routes to financial cities, ramp up flights to existing destinations

Gulf Air set to add routes to Europe, Middle East
Mumtalakat has injected $1bn into Gulf Air as it seeks to reposition itself in the Gulf’s aviation market

Gulf Air, Bahrain’s state-owned carrier, plans new routes in
the Middle East and Europe to add service to financial centers, chairman Talal
al-Zain said.

The BD400m ($1.06bn ) that the Gulf kingdom injected into
Gulf Air last year has helped “very much” as the carrier reorganizes, al-Zain
said in an interview at his office in Manama.

“Even though we are streamlining the airline, we wanted Gulf
Air to reach more destinations,” as well as adding flights on existing routes,
al-Zain, who is also chief executive officer of the Bahrain Mumtalakat Holding
Co sovereign-wealth fund that owns the airline, said Sunday, without specifying
any cities.

Gulf Air is one of the Middle East’s oldest carriers with
roots dating back to 1950. Bahrain has become the sole owner as neighbouring
Arab sheikhdoms in the Gulf dropped out to form their own airlines. Gulf Air is
in the midst of a three- year reorganization to restore profit as it confronts
newer rivals in the region such as Emirates, Etihad Airways and Qatar Airways.

The Bahraini carrier is one of more than 35 companies in
which Mumtalakat owns stakes. The fund was established in 2006 as an
independent holding company for the kingdom’s government- owned businesses
outside the oil and gas industries.

Gulf Air, like other airlines, is a “challenging asset,” as
conditions such as fuel prices or natural disasters hurt business, Al-Zain
said.

At the same time, the carrier is one of “the most important
assets we have” as part of government’s infrastructure policy to attract global
players to set up operations in the island nation, he said.

Mumtalakat was removed from CreditWatch negative by Standard
& Poor’s debt-rating company last month. S&P cited “the diminished
near-term political tensions and our expectation that increased public spending
will lift economic growth next year” in Bahrain.

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