Board Disagreed With Cancelling $3B Aircraft Order

Well, they said it was no big deal... but apparently it was. The entire board of directors for Kuwait Airways Corp. resigned Sunday and the Kuwaiti government didn't hesitate in accepting the resignations.

As ANN reported, KAC's order for 19 new aircraft from Aviation Lease and Finance Co. (ALAFCO) was abruptly cancelled in August by the government. The $3 billion dollar deal, for seven Airbus A320s and 12 Boeing 787 Dreamliners, reportedly failed to meet proper government approval.

"ALAFCO received a letter from Kuwait Airways saying it has not obtained the necessary government approval to sign a final deal with ALAFCO," the company told the Kuwait stock exchange in a statement.

ALAFCO downplayed the deal, according to a report published by Agence France Presse, saying the cancellation was merely due to a delay for a debate about opening KAC up as a public company and selling stock to the public. This debate by the Kuwait government and parliament had been postponed until the next parliamentary term opens October 30 according to AFP.

Now, the board, headed by ruling family member Sheikh Talal Mubarak al-Sabah, has resigned because it contends the government scrapped the deal because it wanted KAC to purchase the new aircraft from the manufacturers directly instead of through a leasing agent, according to Faisal al-Hajji, the state minister for cabinet affairs.

KAC has repeatedly come under fire from members of parliament with accusations of mismanaging public monies and has seen more than $2 billion in losses in the past 17 years.

FMI: www.da.gov.kw/eng, www.kuwait-airways.com