Alafco downplays failed KAC deal

Kuwait’s Aviation Lease and Finance Co. (Alafco) said yesterday it would lease out 19 aircraft initially intended for the state-owned Kuwait Airways (KAC).

The airline cancelled a $3 billion deal to buy 12 Boeing 787 Dreamliners and seven single-aisle Airbus A320s after parliament refused to approve the funding.

“Alafco is currently in negotiations with potential lessees to secure leases for these aircraft” chairman Ahmad Al-Zabin told a news conference.

Al-Zabin said the failed deal would not have a negative effect on the company and that he was sure the planes in question would be leased at high returns.

Alafco shares tumbled Seven % after the deal fell through, their biggest one-day loss in 11 months.

Eighteen local, regional and international companies had applied to lease the planes, Al-Zabin said. He declined to identify the customers he was in talks with but said they included a Kuwaiti carrier.

Alafco has refunded an advance payment of $2.85 million to Kuwait Airways, he said.

The airline lost most of its fleet during the 1990-91 occupation by neighbouring Iraq.

Al-Zabin said he was sorry Alafco would not play a role in developing the KAC fleet, but added that selling part of its assets would have been a sacrifice as leasing companies depend on their planes for revenue.

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