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Sun 3 Apr 2011 11:54 AM

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Alafco demands $70m from Wataniya Airways in lease row

Troubled Kuwait carrier is in breach of contract after stopping operations, Alafco said

Alafco demands $70m from Wataniya Airways in lease row
Kuwaiti luxury carrier Wataniya Airways said March 16 it would cease all operations, citing finances and regional unrest

Alafco Aviation Lease & Finance Co is asking Wataniya
Airways to pay the company about $70m for the remaining period of an aircraft
leasing deal.

"Alafco had signed a deal to lease three aircraft to
Wataniya Airways from 2009 to 2017," Alafco said in a statement to the Kuwait
stock Exchange Sunday.

"Wataniya Airways ceasing its operations is regarded as
a breach to the deal."

Alafco is willing to negotiate with Wataniya Airways for a “fair”
compensation for the damage it incurred due to Wataniya halting its operations,
according to the statement.

Kuwaiti luxury carrier Wataniya Airways said March 16 it
would cease all operations, citing finances and regional unrest.

The company said March 30 it is studying the conditions of
two leasing companies to take back four planes it had leased.

Wataniya had a net loss of KD14.1m ($50.85m) in 2010,
compared with losses of KD10.9m a year earlier. Wataniya's total assets came in at KD78.4m in 2010, while
shareholders equity was at KD24.7m.

The firm's stock has lost 35 percent this year after
dropping 29.8 percent in 2010.

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