Kuwait Airways considering sukuk to finance Airbus deal
Kuwait Airways plans to purchase 25 new planes and lease 12 aircrafts from Airbus, representing the airline's largest overhaul in more than twenty years (Courtesy of Paul Thomas/Bloomberg)
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The purchase, which represents Kuwait Airways biggest fleet overhaul since the 1990 Iraqi invasion, may be financed by "bonds or sukuk...depending on the decision by the board of directors," according to Kuwait Airways adviser, Amani Bourseli.
Bourseli told Reuters that a consortium of banks will be involved in the deal, and the major purchase would also be partly financed through the firm's capital.
Kuwait Airways has not disclosed how much the deal with Airbus will cost in total, but it is expected that the Gulf airline will receive the purchased planes from the deal between 2019 and 2022. The 12 leased planes are expected to arrive earlier, approximately between the end of 2014 and early 2015.
The airline is also planning to retire 11 planes out of its 17-jet fleet once the new aircrafts arrive.
Kuwait Airways' order follows its winning of a $500 million settlement from Iraqi Airways that effectively ended a twenty-year conflict over Saddam Hussein's damage and confiscation of Kuwait aircrafts and parts during the invasion of the Gulf country in 1990.
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