Kuwait Airways cancels LoI to take 19 ALAFCO 787s, A320s

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Kuwait Airways has been forced to cancel its agreement to acquire 19 aircraft from lessor Aviation Lease and Finance Company (ALAFCO) after failing to secure Government approval for the deal.

The airline had signed a letter of intent earlier this year to take the aircraft – comprising 12 Boeing 787s and seven Airbus A320s – and had recently pressed for rapid Government endorsement of the acquisition.

But in a statement to the Kuwaiti stock exchange today ALAFCO says that it has received a letter from Kuwait Airways saying that the carrier had not obtained this necessary approval.

ALAFCO says that, as a result, the agreement is “null and void” and states that it is cancelling the letter of intent.

The Kuwaiti-based lessor ordered six General Electric GEnx-powered Boeing 787-8s last year, and another six this year. It placed a follow-on order in July for another ten of the type.

At the Paris Air Show this year ALAFCO also ordered seven Airbus A320s when it firmed its commitment for 12 Airbus A350 XWB twin-jets.

ALAFCO has not indicated whether the Kuwait Airways decision will affect its orders.

Kuwait Airways could not immediately be reached for comment. The flag-carrier, which has identified a need for 36 aircraft by 2019, had been in discussions earlier this month with the country’s regulators to firm financing arrangements and terms for the fleet renewal.