Airline's entire board resigns after government refuses to approve fleet renewal plan
long-simmering frustration at Kuwait Airways with its government has finally boiled over after the collapse of a fleet-renewal agreement pushed the airline's entire board to resign.
The seven-member board quit in September after the carrier failed to obtain governmental approval to lease 19 aircraft from Kuwait's Aviation Lease and Finance Company (ALAFCO). The relationship of Kuwait Airways with the government has frequently been rocky, with managing director Sheikh Talal Al-Sabah openly critical of the slow progress of privatisation and the inflexibility of state ownership.
But the disintegration of the lease deal appears to have prompted a backlash from the board members, who cite excessive government interference among several reasons for their mass resignation. Kuwait Airways had signed a memorandum of understanding with ALAFCO earlier this year to lease 12 Boeing 787s and seven Airbus A320s. It had been pressing for a quick endorsement of the agreement and its financing so that it could meet proposed delivery schedules.
Despite pointing out the "necessity and urgency" of the lease deal to the government, Kuwait Airways admitted to ALAFCO in late August that it could not secure the necessary authorisation to proceed with the deal.
ALAFCO then scrapped the tentative agreement, labelling it as "null and void".
"The board is very unhappy with the government," says a Kuwait Airways source familiar with the situation, stating the board feels that government ministers meddle too much in the carrier's development plans and take too long to reach decisions.
Kuwait Airways is now awaiting the appointment of a new board. The fleet renewal programme will be addressed by a committee which will speak directly to Airbus and Boeing, and present a plan to the government within two months. Forecasts of the airline's fleet requirements to 2019 predict a need for 36 aircraft, comprising 16 long-haul and 20 short-haul jets. The airline source says the carrier will probably have to arrange another lease to cover interim lift until new types can be delivered.
Source: Airline Business
