Jazeera Airways sizing up a stake in national airline
“Jazeera Airways board will look at investing in Kuwait’s aviation industry, [including Kuwait Airways], provided the financials are right. Today, we don’t have a balance sheet for Kuwait Airways. But we would be definitely interested in picking up an equity stake in Kuwait Airways,” Marwan Boodai, Chairman of Jazeera Airways, told Gulf News in a phone interview.
If the move materialises, the privately-owned Jazeera Airways will become the second budget carrier in the world to have acquired a stake in the full-service carrier, according to industry experts. The only other such example, as Boodai points out, is that of AirAsia investing in Malaysian Air.
He added that while Jazeera Airways has not yet made the bid for the national carrier, he believes there is a “green shoot” in Kuwait Airways.
Having received the government’s nod for privatisation earlier this year, the loss-making Kuwait Airways is yet to be privatised, following which the government will sell 35 per cent stake in the airline.
“The government approved privatisation of Kuwait Airways Corporation (KAC) but has failed to sell the company [yet]. It will take another year-and-a-half to two years for the government to sell the stake in the airline. They have already started taking the steps,” said Boodai.
Asked how acquiring the Kuwait Airways stake would help Jazeera Airways, he said: “The one company that will benefit from acquiring Kuwait Airways stake is Jazeera Airways. Kuwait Airways is meant to focus on long haul routes but it is no longer serving long haul destinations. And as a result they are dumping all the short haul capacity on Jazeera Airways. So we are the ones hurt.” He added that Kuwait Airways’ acquisition will bring major advantages to Jazeera Airways such as cost savings, fleet alignment, maximising returns and so on.