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Gulf Air signs $6 billion deal for 24 Boeing 787

DUBAI — Gulf Air, Bahrain's loss-making national carrier, and Boeing Co. signed a $6 billion agreement for the delivery of 24 Dreamliner aircraft to begin in 2016, airline spokesman Adnan Malik said.

The Dreamliner is Boeing's most successful new airplane programme in terms of sales with more than 800 orders valued at more than $120 billion. It ranked second in commercial orders last year behind the 737 narrow-body model.

Gulf Air has 30 planes to service 26 destinations. The company was talking to Boeing, the world's second-largest commercial-plane manufacturer, and Airbus SAS, Chairman Mahmood Al Kooheji said at the Dubai Air Show in November.

Gulf carriers including Dubai's Emirates, Abu Dhabi's Etihad and Qatar Airways are among the biggest customers for Airbus and Boeing as the airlines build the region into a hub for tourism and transit flights between Europe, Asia and Africa. Middle Eastern carriers posted orders and options worth about $85 billion with Airbus and Boeing at the Dubai Air Show in a bid to meet surging travel demand.

Boeing spokesman Jim Proulx declined to discuss the status of the talks with Gulf Air.

"Boeing does not comment on order negotiations with customers until the order is complete," he said by telephone from Chicago. "Until the order is booked, we can't talk about it."

Possible IPO

The agreement was signed on the eve of a visit by US President George W. Bush to the Gulf island, home of the US Navy's 5th Fleet.

Gulf Air may hold an initial public offering in 2008 and has reduced losses by 30 per cent in recent weeks and is now losing $600,000 a day compared with $1 million earlier, Chairman Al Kooheji said in November.

In July, the carrier said its Chief Executive Officer Andre Dose will resign after less than four months in the job without saying why. Dose, a former chief executive of Swiss International Air Lines Ltd., took the job about nine months after his predecessor James Hogan left to run Etihad Airways. He had trimmed the airline's fleet and cut long-haul routes in a bid to stem loses.

Aviation Lease & Finance Co., a Kuwait-based airplane leasing company, signed a preliminary agreement in September to provide three Airbus SAS A320-200s to Gulf Air. Gulf Air will start taking delivery in 2009 and lease the airlines for eight years, Alafco said in a regulatory filing.

Less fuel, faster speeds

Arab airlines are expected to increase their combined fleet by almost two-thirds to 900 aircraft by 2015 from 550 planes in 2006, according to the Arab Carriers Organisation.

Boeing set a third straight annual record with 1,413 commercial jet orders in 2006, driven by demand from Asian and Middle Eastern airlines. The 737 narrow-body model had 846 orders followed by the 787 Dreamliner with 369 orders, according to the Chicago-based company's web site.

The Dreamliner will use 20 per cent less fuel for comparable missions than today's similar mid-sized airplanes, Boeing said on its web site. It also will travel at speeds equal to the fastest wide-body aircraft and provide airlines with more cargo-revenue capacity.

Boeing fell $1.84, or 2 per cent, to $80.52 on January 11 in New York Stock Exchange composite trading. The shares have fallen almost 9 per cent in the past year.