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These are troubled times for the aviation industry. But misery loves company and at least most airlines can find solace in the fact that their peers are also feeling the pinch from rising fuel prices and economic contraction.
Not so Gulf Air, which has to contend with ever more bullish regional rivals on its doorstep.
In the airline's heyday in the 1970s and 1980s it was under the joint ownership of the governments of Qatar, Bahrain, Abu Dhabi and Oman. As the only pan-Gulf carrier, Gulf Air dominated Middle Eastern skies.
But then Dubai created Emirates and with it a highly aggressive business model.
All the original shareholders but Bahrain have now exited Gulf Air to focus on their own national carriers, leaving the airline to grapple with competition from its erstwhile owners. Dubai, Abu Dhabi and Qatar's competitive instincts and financial backing of their airlines have left the former market leader trailing in their wake.
"Gulf Air's decline reflects the shift in the centre of gravity of the Gulf towards the Emirates in particular," says Murdo Morrison, editor of Flight International. "It seems almost like an anachronism now."
Years of losses spurred a succession of restructuring plans to improve the airline's financial performance. But managers concede that a target to make the company profitable by 2010 has been made impossible by the soaring cost of fuel.
Yet Bahrain is standing by its airline, which is now wholly owned by Mumtalakat, the country's sover-eign wealth fund.
Bahrain's position as the Gulf transport hub may be lost to regional rivals, but the Middle East aviation industry is still expanding and Bahrain needs a flag carrier to support its econ-omic growth and to diversify, Gulf Air managers say.
The company is focusing on improving its efficiency, shortening turnround time and cutting costs, says Bjorn Naf, the airline's chief executive.
"If we improve in these areas, the owners and the board will accept that we are not making a profit for now, as we are adding value to the Bahraini economy."
A document leaked last week to local newspapers said management had forecast cumulative losses of up to 358 million dinars ($950 million) for the next two years.
Gulf Air said the document was not accurate and had not been presented to the board.
Recognising that cutting costs may not be enough, Gulf Air also wants to increase its revenue, and has ordered 59 Airbus and Boeing aircraft with a total book value of $11 billion. It aims to add three destinations every year.
The airline expects that the additional routes will put between 8 per cent and 12 per cent on to revenue growth and 10 per cent to the top line.
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