Gulf Air to cancel Jet lease deal

Bahrain's national carrier Gulf Air has walked away from a deal to lease four Boeing 777 aircraft from India's Jet Airways, citing economic conditions.      

Gulf Air said it had an option to lease the aircraft after an existing six-month contract expires, but has decided not to go ahead, the Gulf Daily News reported.      

"After careful analysis of various commercial and other business considerations, Gulf Air has decided not to pursue the dry lease option for the foreseeable future," the daily quoted the airline as saying.      

Dry leases are contracts under which airlines lease planes without staff.      

Gulf Air said in February it had agreed to lease four Boeing 777s as part of its efforts to replace its fleet.      

The existing six-month contract is a wet lease agreement, which typically includes staff.      

Meanwhile, Gulf Air has placed a $270 million order for CFM56-5B engines to power 15 new Airbus A320 family aircraft.      

The aircraft are scheduled for delivery between 2009 and 2013. The carrier has also signed a 10-year On Point Solution agreement of $100 million with GE Aviation for the maintenance, repair and overhaul of the engines.      

"Selecting the CFM56-5B engine demonstrates our continued trust and confidence in this product's excellent technical capability," said Gulf Air chairman Talal Alzain.