Gulf Air is one of 12 carriers targeted for takeover by British Airways (BA) and Iberia towards creating the world's largest airline group.
The 12 carriers, also to include Qantas, Cathay Pacific, and Air Berlin, have reportedly been short listed after BA and Iberia initially considered 40 airlines, unveiled “Travel Gazette”. The list could also include India's Kingfisher Airlines, and Chile's LAN which announced plans to merge with Brazil's TAM.

BA Chief Executive Willie Walsh said the expansion plan was a long-term goal that would probably not be completed until he retired, the journal said. But creating International Airlines Group (IAG) through the merger with Iberia had been done with the intention of pursuing consolidation, he said.

The Iberia deal and the joint venture with American Airlines were not meant to be an end in themselves, added Walsh.

The creation of IAG is expected to be completed by the end of the year. Walsh will become Chief Executive of IAG, and BA Finance Director Keith Williams will become Chief Executive of BA. BA and Iberia will continue to operate as separate brands.

Gulf Air would not speculate on the prospect of being swallowed up by the industry's proposed giant. But the news comes at the same time the national carrier has revealed that it is actively seeking to join an alliance of airlines, in a bid to expand the services it offers customers and to attract more passengers on board.

It's the latest strategic move by President and Chief Executive Samer Majali who has already made strides in improving Gulf Air's reliability, upgrading its ageing fleet, expanding its regional destinations and bringing big losses under control, as it prepares for eventual privatization.

Majali believes striking an alliance would offer huge benefits and Gulf Air is currently in discussion with the major alliances.