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Tuesday, November 26, 2013, 12:00 Hrs  [IST]

Kuwait Airways' Chairman suspension impedes A330 aircraft deal with Jet Airways

Jet Airways (India) Ltd’s plan to sell or lease five of its wide-body Airbus A330 planes to Kuwait Airways has hit a hurdle, with the Kuwait government suspending its flag carrier’s Chairman, Sami Al-Nesif. This week, Al-Nesif had announced that Kuwait Airways was looking to purchase five A330s from Jet Airways and added Airbus was mediating the deal. Within 24 hours of the announcement, Essa Al-Kandari, Minister for Transport, Kuwait, suspended Al-Nesif over the deal to buy “five used planes from India’s Jet Airways”, Business Standard reported.

Al-Nesif was banned from signing any agreement with any company. The airline's Deputy Chairman will take his post. Kuwait Airways’ management has been asked to halt the deal pending an assessment.

Jet Airways has 14 Airbus A330 planes, but five of them are grounded for several months after the airline cancelled loss-making long-haul routes, including Johannesburg, Milan and New York. It plans to sell or lease them to improve earnings. Kuwait’s decision to halt the deal will impact Jet Airways.

A spokesperson of Jet Airways said, “We are not aware, as no such decisions have been taken to sell planes to other airlines.”

Earlier in the day, Jet Airways said several companies had shown interest in purchasing the planes and the airline was evaluating the proposals. "We are yet to take a decision,'' the spokesperson added. The grounding of planes has added to Jet’s losses. This involved a cost of USD 16 million in the fourth quarter of 2012-13.  In the first quarter of the current financial year (2013-14), airline said the impact of grounding was USD 21 million.
 
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