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Kuwait Airways Raises Airbus Order to 31 Jets in $6 Billion Deal

Feb. 21, 2022
The deal comes after what the airline labelled occasionally "heated" negotiations following probes over allegations of kickbacks surrounding the initial order.

Kuwait Airways announced Monday an expanded $6 billion deal with Airbus for 31 planes, restructuring an agreement reached in 2014. 

The deal comes after what the airline labelled occasionally "heated" negotiations following probes over allegations of kickbacks surrounding the initial order.

"We have managed to agree on a monumental restructuring that will position Kuwait Airways in a much stronger place to succeed for the next 15 years," company chairman Ali Al-Dukhan told a news conference.

The new agreement, which adds three new aircraft to the existing order of 28, includes nine Airbus A320neo, six A321neo, three A321neoLR, four A330-800neo, seven A330-900neo and two A350-900.

Al-Dukhan said the reshaped deal, aimed at giving the airline greater flexibility after the travel industry was rocked by the coronavirus pandemic, now carried a "total value of about $6 billion."

"Although corrections were made in 2018, the deal needed further corrections to suit Kuwait Airways' future, especially with the need to transition and become more flexible in a post-Covid aviation industry," he said.

Kuwait Airways has so far received eight aircraft and "we expect two (more) before the end of the year," Dukhan told AFP. "Most of the aircraft will arrive by 2026." 

"The agreement will give us more flexibility to expand to more destinations," he said, adding that the airline was aiming to grow from 57 to 100 direct destinations within the next two years.

- Record profits -

Negotiations took place against the backdrop of bribery allegations that cost Airbus billions of dollars in settlement fees in other countries in 2020.

"As we initiated the negotiations, we knew we were already the underdogs going in as 40 percent of the deal's value had already been paid and the delivery had started," Al-Dukhan said.

He added: "We entered four months of serious, professional negotiations, which did get heated at times, but always maintained respect and understanding of each other's wants and needs."

Kuwait Airways had initially ordered 15 Airbus A320neo and 10 A350 in 2014, with delivery beginning in 2019.

In February 2020, Kuwait's parliament opened a fact-finding panel to probe allegations of kickbacks, after Airbus paid huge fines to settle bribery cases in French, British and American courts.

Under the settlement, Airbus agreed to pay 3.6 billion euros ($4.1 billion) in fines to settle corruption probes into some of its aircraft sales.

Last week, the European giant announced record profits of 4.2 billion euros ($4.8 billion) in 2021, after two straight years of losses during the pandemic.

Deliveries of aircraft rose eight percent to 611 planes, Airbus said in an earnings statement.

Copyright 2022, Agence France-Presse

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