Kuwait's national carrier is due to sign a multi-billion-dollar deal with Airbus to purchase 25 new aircraft valued at $3.0 billion with the first delivery expected in 2019, a well-informed newspaper reported on Sunday.
The deal will be signed "very soon," the privately-owned Al-Watan newspaper said quoting sources close to decision-makers. Last week Kuwait Airways Co. (KAC) board of directors decided to choose an offer made by Airbus because it carried a price tag $280 million lower than one made by Boeing, the report said.
The deal includes 10 Airbus A-350-900 and 15 A-320 neo and the delivery of the planes will start after six years, Al-Watan said. KAC made no comment on the report but its new chairman Sami al-Nasef told AFP in January, after parliament passed a bill to transform the airline into a commercial company, that they planned to buy around 21 new aircrafts within two years.
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In the meantime, KAC will lease 13 big and small Airbus planes with the first two A320 due to arrive in July, Al-Watan said. 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 in KAC.
Nasef told MPs in January that only 10-12 aircraft of the carrier's ageing fleet were operational and the remainder were under "extended maintenance." Under the KAC privatisation bill, initially issued by the emir in October when parliament was dissolved, the government will pay all losses incurred by the airline and estimated at more than $1.5 billion (1.1 billion euros).
Kuwait Airways has posted a loss in all but one of the past 21 years, amounting to more than $2.7 billion. Such losses are covered by the state because the carrier has been entirely government-owned.