Gulf Air Board gives approval for development of second three year strategy plan and a mandate for a fleet re-equipment programme

Chairman of the Board of Directors, Sheikh Mohammed Al Harthy, once again reaffirmed the Owner States' 100 per cent commitment to Gulf Air, and acknowledged the continuing list of major achievements. This has led to Gulf Air receiving numerous international awards in 2004.

Sheikh Al Harthy expressly praised the untiring efforts of management and staff, which he said, was a key factor in Gulf Air winning these awards and which would continue to play a major contribution in re-establishing Gulf Air as one of the leading airlines of the world.

More significantly, as a result of the airline's steady progress towards profitability, based on a commercial platform, the Board also gave its unanimous approval to the development of a second three year strategy plan. This will come into effect in 2005/2006 and will ensure the company continues on its path of profitability.

In addition a mandate was given to management to commence discussions with manufacturers for the re-equipping of the airline, in particular the phasing out of old aircraft and the introduction of more modern planes.

President and Chief Executive James Hogan thanked the board for their continued support and their forward thinking.

"As an airline, Gulf Air faced the toughest aviation market ever in 2003 and came through not just unscathed but significantly stronger, standing us in good stead for 2004," he said. "We continue to out-perform many other leading airlines and in the first quarter of this year we witnessed a 32 per cent increase in passenger traffic and a 21 per cent in gross cargo revenue compared to the previous year. Furthermore we are looking at one of our strongest levels of advanced bookings for the summer period, which has been boosted by, among others, the introduction of a daily non-stop service between Muscat and London and a through-runner service between Dubai and London, to bring the total flights to the UK to five per day.

"The Board's approval of two major initiatives - a second three-year strategy programme and a fleet re-equipment programme is testimony to the fact that Gulf Air is, and can continue to be successful, while operating on a commercial platform," he added.

Hogan said that by having laid the foundations on which the business will return to profitability means Gulf Air is also in a better position than most other airlines to weather any storms that arise.

"Every airline is being hit by the excessive fuel prices that exist today, but we are confident that it will not divert us from reaching our goal of break even by the year-end," he said. "We are particularly encouraged by the level of interest in the Muscat - London service. From the inaugural flight on 21st June - the same day as the Dubai-London service commences - through the entire summer, we are witnessing exceptional demand for seats in all classes."

Hogan also reported to the Board on the success of Gulf Traveller, the full-service all-economy subsidiary airline of Gulf Air, headquartered in Abu Dhabi, which celebrated its first anniversary this month.

Gulf Traveller celebrated a tremendously successful inaugural year on 31st May 2004," he said. "With average loads in excess of 70 percent, it has achieved much better results than our confident projection. Since its establishment, the successful division has contributed significantly to Gulf Air's strengthened financial position and strong performance."