MANAMA, (Reuters) – Gulf Air, a loss-making airline jointly owned by Bahrain and Oman, said on Tuesday it would cut 25 percent of its workforce, or about 1,500 jobs, as part of a two-year plan to save around $175 million a year.

The restructuring will cost 310 million dinars ($822 million), including redundancy pay and investment in its fleet improvements, Chief Executive Andre Dose told reporters.

“There are going to be jobs lost, about 25 percent … to be very frank about it. We have to downsize the operation,” Dose said, adding that some jobs would be lost through attrition.

The majority of the job losses would be among cabin crew, who include many foreigners, and staff stationed abroad, to minimize the impact on Bahrainis, Deputy Chairman Mahmood al-Kooheji said.

The airline’s financial situation was “critical” and that it was losing more than $1 million a day, Dose said.

“Including other costs such as financing, the figure would even be substantially higher,” he said in a statement.