2006–2009: full ownership by Bahrain
The new summer schedule commencing 28 April 2006 saw the complete withdrawal from Abu Dhabi as a hub, following the decision on 13 September 2005 by the Emirate of Abu Dhabi to withdraw from Gulf Air and establish UAE flag carrier Etihad Airways.[18] Gulf Air changed its operations to a dual-hub basis between Bahrain and Muscat airports. The airline ran a series of advertisements in local newspapers, thanking Abu Dhabi for its contribution to Gulf Air. As the national carrier for the United Arab Emirates for over 35 years, it had a large customer base located in Abu Dhabi. Gulf Air endeavoured to show continuing support for flights to Abu Dhabi from Bahrain and Muscat, connecting to the rest of the Gulf Air network, via advertisements placed in local newspapers.
James Hogan resigned as president and chief executive officer as of 1 October 2006 (subsequently becoming CEO at rival airline Etihad). Ahmed Al Hammadi was named acting chief executive officer, until Swiss national André Dosé, the former chief executive officer of Crossair and Swiss International Air Lines, became CEO on 1 April 2007. A few days later, Dosé announced a BD310 million (US$825 million) restructuring plan. This included originating or terminating all flights in Bahrain; ceasing routes to Johannesburg, Dublin, Jakarta, Singapore, Hong Kong and Sydney; eliminating all Boeing 767s and Airbus A340-300s from the fleet; introducing the Airbus A321 in July 2007 and the Airbus A330-300 in 2009; and potentially terminating employment based on performance, and without regard for nationality. This led to some employees applying for jobs in other airlines and, in less than a month, Gulf Air lost 500 persons from its workforce, prompting the airline to rule out mass layoffs as part of its recovery plan, except for performance reasons.
On 5 May 2007, the government of Bahrain has taken full ownership of the airline following an extraordinary general meeting, as its joint-owner Oman withdrew from the airline to focus on Oman Air.[19] Gulf Air had also announced cutbacks to 25% of its workforce or roughly 1,500 jobs as part of a 2-year restructuring program to stop losses of $1 million a day.[20] André Dosé resigned on 23 July 2007 and was replaced by Bjorn Naf, prompting the Bahraini government to call for further transparency in the airline's running, and delegating parliament's financial and economic affairs committee to investigate Gulf Air's situation.[21] On 6 November 2007, Gulf Air started its third daily non-stop flight to London Heathrow Airport from Bahrain.
The airline inaugurated services to Shanghai Pudong International Airport on 16 June 2008 (the route was terminated on 25 December 2009). It also placed orders with Boeing (for 16 787s)[22] and Airbus (for 15 A320s and 20 A330s) to upgrade its fleet. The airline's last commercial Boeing 767 flight was on 29 May 2008. On 3 July 2008, Gulf Air was announced as the official sponsor of London association football club, Queens Park Rangers. The same year, Gulf Air signed a lease agreement for five aircraft with International Lease Finance Corporation (ILFC) as part of its growth and expansion strategy. The lease was for six years for two Airbus A319s and three Airbus A330-200s, due for delivery from March through May 2009.
In March 2009, Gulf Air signed a 42-month lease agreement with Jet Airways for four Boeing 777-300ERs, but the aircraft were returned to Jet Airways starting in September 2009. In May, Gulf Air inaugurated summer seasonal flights to Alexandria, Aleppo and Salalah. On 1 September 2009, Gulf Air resumed flights to Baghdad.[23] Services to Najaf and Erbil began shortly afterward.
Starting June 2009, Gulf Air's Golden Falcon logo was seen on the streets of London, emblazoned on the side of the city's taxi cabs, as part a two-year marketing deal. Fifty Hackney Carriages were to be rolled out in full Gulf Air livery to promote the airline's flights from London Heathrow to Bahrain and beyond.[24] Later in June, the carrier announced the departure of CEO Bjorn Naf and the appointment of Samer Majali (who worked previously for Royal Jordanian) as CEO effective 1 August 2009.