Engine deal for Gulf Air

Gulf Air has announced a $1.5 billion engine deal to prove that its ambitious plans to rule the skies over the region will not be dampened by the global economic recession.

The national carrier has been the subject of fierce criticism by some of Bahrain's political leaders who have called for managerial changes.

However, new Gulf Air aircraft will be powered by Rolls-Royce in a deal signed at the Paris Air Show this week by Gulf Air chairman Talal Al Zain and Rolls-Royce chief executive Sir John Rose.

Trent 700EP (enhanced performance) engines will power 20 Airbus A330 aircraft, with deliveries beginning in 2012. The contract includes a long-term service agreement. In addition, Gulf Air also renewed its servicing deal on Trent 700s that power 10 A330s already flying.

Ismail Karimi, deputy chief executive officer, Gulf Air, said: "As Gulf Air progresses with its ambitious re-fleeting and product enhancement strategy, we need an engine to power our future A330s. After exploring a number of options, we have selected the Trent 700 as the one best suited to meet our future needs. The Rolls-Royce engine offers the best deal for Gulf Air technically, operationally, commercially and environmentally.

"Our new aircraft will offer improved customer service in terms of comfort and reliability and will also continue our drive to keep operating costs to a minimum."

Phil Harris, Rolls-Royce senior vice president airlines - North Asia and Middle East, said: "We are delighted that Gulf Air has selected our Trent 700 technology and 'TotalCare' package to power its new aircraft. Rolls-Royce technology will enable the customer to achieve excellent technical performance and world-class service support."

The A330 routes of Gulf Air include destinations such as London, Paris, Frankfurt and Kuala Lumpur.

A defiant Boeing said that the aviation industry's troubles may be ending, while Airbus

kicked off the race for plane orders at this year's Paris Air Show, clouded by rainy skies, recession and the unexplained crash of Air France Flight 447.

With the global aviation industry facing unprecedented losses and falling revenue, no one attending the 100th anniversary of the world's first and largest air show was expecting Airbus or Boeing to unveil the raft of new jet orders that have been a staple of the event over the past four years.

But some airlines were still willing to get out their checkbook, including Gulf-based carriers such as Gulf Air and Qatar Airways. Airbus scored its first order of the Paris Air Show from Qatar Airways, which wants 24 jets from the Airbus A320 family.

As Rolls-Royce PLC signed its order with Gulf Air, Qatar Airways' head, Akbar al-Baker, announced a firm order for 24 of the planes, including 20 single-aisle A320s and firming-up of orders for four A321 jets announced last year at the Farnborough Air Show.

He said the deal announced on Monday is worth $1.9 billion, which is about the same as the list price. Airlines, however, usually negotiate steep discounts to the list price, particularly during grim economic times.