KUWAIT: Kuwait Airways received instruction from Minister of Communications Essa Al-Kandari to freeze a deal to purchase five used aircrafts from India's Jet Airways, Al-Qabas daily reported yesterday one day after first reporting the deal. Minister Al-Kandari explained in a letter to the Kuwait Airway's board of directors that he needs to review details about the deal and negotiation procedures before a decision can be made. "The minister asked about the supervisory authorities that gave them approval to go ahead with the deal", said sources quoted in Al-Qabas' report.
News about Kuwait buying five used jets for KD 80 million sparked angry reactions at social network, especially that it came simultaneously with news about multibillion-dollar deals cut by airlines in Gulf countries during the recent Dubai Airshow. In the meantime, Al-Qabas contacted sources close to the Kuwait Airways' board of directors who defended the decision for many reasons including the urgent need for fleet expansion and the lower cost that the deal with Jet Airways would provide.
The source compared between Kuwait Airways' proposed agreements and deals signed by Fly Dubai, Qatar Airways, and other airlines in the Arabian Gulf region. "Those deals are for expansion and to purchase new aircrafts that arrive in nearly ten years; whereas the Kuwait Airways is at urgent need to increase the number of its fleet which makes buying planes with relatively short operational age a good choice", the sources explained. According to the sources, the planes which have been in service for four years are expected to arrive within two months if the government approves the deal. Al-Qabas wrote Monday that the Kuwait Airways resorted to purchasing the five Airbus A330-200 aircrafts, each with a capacity of 252 passengers, after an agreement earlier this year with Airbus to purchase and rent the same class of aircrafts fell apart due to lack of funding and after Boeing reportedly entered negotiations with the national carrier.
Meanwhile, the sources further defended the new deal as being 'better' than the initial deal with Airbus because of the benefits of having full ownership over the aircrafts as opposed to renting them. "The board of directors found out that purchasing the planes from Jet Airways saves 40 percent compared to renting them directly from Airbus for 8 years", the sources explained. They further indicated that Jet Airways has previously sold aircrafts to The Etihad Airways, Royal Brunei, and other airlines "as part of its plans to reduce activity and focus on the domestic market".
© Kuwait Times 2013
