Kuwait gov't approves deal for 25 Airbus planes

Kuwait Airways will also have option for 10 other aircraft, says carrier's chairman
(AFP/Getty Images)
By Reuters
Thu 16 May 2013 01:53 PM

State-owned Kuwait Airways said it had signed an initial agreement with Airbus
to buy 25 new aircraft and take an option on 10 more in the biggest overhaul of
its fleet since the 1990 Iraqi invasion.

The order for the new planes would include 15 A320neo narrowbody jets and 10
of Airbus's new A350-900 XWB, Chairman Sami al-Nisf told a news conference on
Thursday.

"We signed a letter of acceptance with Airbus," he said, adding that this was
the step before signing a memorandum of understanding with Airbus within the
next couple of weeks.

He declined to give a value for the order. The airline expects Airbus, owned
by aerospace and defence group EADS , to start delivering the aircraft in
2019.

A source said on Monday that Kuwait Airways would pay around KD850m ($2.98bn) for 25 new planes. Such an order would be worth $4.38bn at list prices, but aircraft are often sold at a discount.

The airline judged Airbus's offer the most attractive based on price and
technical specifications in a tender that included Boeing and Bombardier, the
source said.

The airline wants to take out of service 11 jets from its old fleet of 17, in
which the planes' average age is 18 years.

The options are for five more A320neo and five more A350-900 XWB, Nisf said.
He added that under the deal, which has government approval, the airline would
also lease a further 22 Airbus jets.

The company is in talks with local and international banks for part of the
financing.

Airbus is confident the A350, Europe's response to the Boeing 787 Dreamliner,
can make its maiden flight in the summer, it said earlier this week.

The Kuwait Airways order comes months after the Gulf Arab state was awarded
$500m by Iraqi Airways for damage caused when former Iraqi President
Saddam Hussein's forces seized aircraft and parts, ending a two-decade row over
compensation.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.