Gulf Air concludes new credit arrangement

In terms of the agreement, Standard Chartered Bank, acting as the mandated lead arranger and agent for the consortium of lenders, which includes Commercial Bank of Qatar, First Commercial Bank - Singapore, National Bank of Oman, State Bank of India - Bahrain, Persia International Bank and The Arab Investment Company, will extend credit facilities valued at USD75 million to the airline. The loan is repayable over a period of three years.

In formulating its new ten-year strategy, the airline identified a requirement for further credit facilities that will allow it to maintain the momentum of the growth and change achieved during the implementation of its three-year restructuring programme, Project Falcon.

"Despite significant challenges from fuel and competition within the region, we have made positive progress re-engineering our business,"

said James Hogan, Gulf Air's President and Chief Executive.

"Abu Dhabi's withdrawal has necessitated a rethink of our strategy around a two-hub approach. This will require changes to our network, routes, fleet, and allocation of resources."

"This means that we have to keep investing in the core areas of our business. In some areas, consolidation and traditional style cut backs will be necessary, but in principle we are confident that we can build on what we have achieved to date and this will require a bold, progressive strategy underscored by significant investment."

In 2006, Gulf Air's investment will be most visible in the airline's state-of-the-art simulator centre, which will be opened in the first quarter of the year. The airline has also signed an agreement for the provision and installation of new First and Business Class seats in its Airbus A340 aircraft and the simultaneous refurbishment of the aircraft interiors to match the standards of the award-winning A330 fleet. Gulf Air will also install new in-flight entertainment systems during the year.

"Gulf Air's Project Falcon initiatives have been instrumental in re-establishing the airline on the world stage as a leading service brand and unique regional airline," said John Iossifidis Regional Head, Client Relationships, Wholesale Banking at SCB. "We are delighted to be working with Gulf Air again and look forward to supporting their strategy for the future."

"Standard Chartered Bank works in partnership with several leading multi-national companies in the Middle East and has a growing portfolio of structured trade finance facilities, which demonstrate the success of our commitment to bringing our global expertise and range of products to our customers in this region," said Aleem Khan, Managing Director, Structured Trade Finance, Middle East and South Asia.