Kuwait International Airport

Kuwait aviation poised to deliver at last, but Kuwait Airways restructure, airport upgrade essential

After a rough two decades for Kuwait Airways, there are signs that the carrier could be finally at the beginning of a major turn-around.

The decks are cleared for a new take-off.

In Jan-2013 the Kuwait parliament gave its final sign-off for the carrier’s privatisation legislation and agreed to pay off its heavy losses. An agreement on fleet renewal, at least a decade overdue, appears to be close to fruition after the failure of several agreements in recent years. And the airline has also settled its long-running dispute with Iraqi Airways over war reparations, with a USD500 million settlement also ratified by the Kuwaiti National Assembly.

Cebu Pacific’s new low-cost long-haul operation to initially focus on Middle East & regional routes

Cebu Pacific’s new low-cost long-haul unit plans to initially focus on Middle Eastern and regional markets as it works towards launching services with 436-seat A330-300s by Jul-2013. Dubai will be the Philippine carrier’s first long-haul route and will likely be followed by service to Abu Dhabi, Saudi Arabia and Kuwait in 2014. But Cebu Pacific over the medium to long-term also aims to use its new fleet of A330s to serve Australia and potentially Hawaii.

Cebu Pacific will become Asia’s fourth low-cost long-haul carrier, joining Jetstar, AirAsia X and Scoot. But Cebu Pacific is implementing a different strategy with an all-economy product and focus on point-to-point traffic. This reflects the different dynamics of the Philippine market, particularly its large overseas population.

Kuwait Airways and Iraqi Airways face brighter future following settlement of long-running dispute

In a landmark development for their national carriers, Kuwait and Iraq have reached an agreement to the long running dispute over Iraqi Airways' debts to Kuwait Airways. The USD500 million settlement ends a conflict which has plagued the development of both airlines and also paves the way for the development of a joint Iraqi-Kuwaiti airline venture.

The two countries have initialled a final settlement agreement, under which Iraq agreed to pay Kuwait USD300 million in reparations over the destruction and seizure of Kuwait Airways assets during the 1990-1991 Gulf War. In addition, Iraq pledged to provide another USD200 million for a joint airline venture between the two nations. The funds for the joint venture will be paid in 1H2013. It is not yet clear what the new joint venture carrier will look like or what roles Kuwait Airways and Iraqi Airways will play in its establishment.

ALAFCO ups order for A320neos

Kuwait’s Aviation Lease and Finance Company (ALAFCO) has finalised a purchase order for 50 A320neo family aircraft and took options for 30 more aircraft to be finalised by year-end. The aircraft will be powered by Pratt & Whitney’s PW1100G engine. The order is another big step for the Middle East’s largest leasing company, which now has a fleet of 48 owned and managed aircraft.

The order kicks off what is expected to be another successful year for the leasing company. ALAFCO recently reported a net profit of KWD47 million (USD171.2 million) for the year to 30-Sep-2011, a 335% increase over the KWD10.8 million profit in the previous year. Profit per share also more than quadrupled, up from 14 Kuwaiti fils per share to 60 fils per share. The profits were driven by a combination of the lessor’s expansion and exceptional gains realised through the adjustment of purchase agreements with aircraft manufacturers.

Jazeera Airways reports another record quarterly profit with yields up 45%

Jazeera Airways, Kuwait’s privately owned low-cost carrier, has reported another record quarterly profit for the three months to 30-Sep-2011. The airline reported an operating profit of KWD7.5 million and a net profit of KWD6.1 million, its fifth consecutive profitable quarterly result since it launched its turn-around programme. The third quarter is the airline's peak period for business, where it usually records the majority of its profits.

The airline handled 337,629 passengers over the three-month period, generating KWD19.3 million in operating revenues, up 38% year-on-year. Load factors were “just over” 70%, stronger than other quarters but slightly lower than other LCCs in the region such as Air Arabia and flydubai.