Kuwait Airways Co. signed a deal with Airbus to buy 15 A320neo and 10 A350-900 planes with options for 10 more, five from each category, chairman Sami al-Nasef said on Thursday.
"We have signed a letter of acceptance with Airbus to buy 15 A320neo and 10 A350-900," Nasef told a news conference, adding that KAC has an option to buy five additional planes from each category.
Delivery of the A320neo will start in 2019 while the others should arrive in 2020, Nasef said.
He said that KAC, a state-owned company that is undergoing privatisation, has received the government's approval for the deal -- which is aimed at replacing the ageing fleet of the oil-rich emirate's national carrier.
Nasef declined, however, to reveal the cost of the deal citing "a confidentiality clause.".
Local daily Al-Watan reported on Sunday that the deal is worth $3 billion (2.3 billion euros).
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Al-Watan said KAC chose the Airbus offer over Boeing Co because it was $280 million cheaper.
Nasef said the deal also includes the leasing of 22 Airbus planes, seven of them to be available in late July. The rest of the leased aircraft will be gradually delivered by 2015.
The planes to be leased are 10 A330, 10 A320neo and two A321, said Nasef.
The chairman said KAC has started negotiations with local and foreign banks for financing the deal but that the value of the loan has not yet been defined.
Advisor to KAC Amani Buresli said the value of the "syndicated loan" will depend on the finances the airlines will get from the government.
In addition to modernising its fleet, the loss-making company wants to make the airline profitable before offering a local or foreign investor a 40 percent stake.
Kuwait Airways has posted losses in all but one of the past 21 years, amounting to more than $2.7 billion, which have been covered by the government.