Kuwait Air to Buy 10 Airbus A350s in $4.4 Billion Jet AccordFiona MacDonald and Andrea Rothman
Kuwait Airways Co., seeking a return to profit within the next three years, agreed to buy 25 Airbus SAS aircraft comprising 10 A350-900s wide-bodies and 15 short-haul A320neos in a deal worth $4.4 billion at list price.
The A320s will arrive from 2019, followed a year later by the A350s, Kuwait Airways Chairman Sami Al-Nesif said at a press briefing today. The carrier, which also secured five options for each model, will lease 22 planes while it awaits the deliveries.
“We will lease as many as we are buying because our fleet is very old,” Al-Nesif said. Kuwait Airways currently operates 17 jets, the bulk of them built by Toulouse, France-based Airbus, though including two Boeing Co. 777 long-range planes.
Airbus had won 616 orders for the A350 series as of April 30, with service entry planned before the end of 2014 as the European planemaker challenges the 777 and Boeing’s new 787 Dreamliner. The U.S. company is also marketing a re-winged and re-engined 777X, though hasn’t committed to the revamped model.
Kuwait Airways said it’s in talks with local and foreign banks regarding financing for today’s plane purchases.
The jets to be leased comprise 10 Airbus A330 wide-bodies, plus 12 A320s and A321s, the company said.
The purchase agreement with Airbus is based around a letter of acceptance, with a memorandum of understanding firming up the commitment to be signed in a couple of weeks.
Al-Nesif said Kuwait Air is targeting a return to profit in two years, “maximum three,” aided by a restructuring plan that includes voluntary job cuts. That would be followed by a sale of the carrier, which was approved by parliament in 2008, with any offer received in the meantime an issue for the government.