Tue, Sep 11, 2007
Board Disagreed With Cancelling $3B Aircraft Order
Well, they said it was
no big deal... but apparently it was. The entire board of directors
for Kuwait Airways Corp. resigned Sunday and the Kuwaiti government
didn't hesitate in accepting the resignations.
As ANN reported, KAC's order
for 19 new aircraft from Aviation Lease and Finance Co. (ALAFCO)
was abruptly cancelled in August by the government. The $3 billion
dollar deal, for seven Airbus A320s and 12 Boeing 787 Dreamliners,
reportedly failed to meet proper government approval.
"ALAFCO received a letter from Kuwait Airways saying it has not
obtained the necessary government approval to sign a final deal
with ALAFCO," the company told the Kuwait stock exchange in a
statement.
ALAFCO downplayed the deal, according to a report published by
Agence France Presse, saying the cancellation was merely due to a
delay for a debate about opening KAC up as a public company and
selling stock to the public. This debate by the Kuwait government
and parliament had been postponed until the next parliamentary term
opens October 30 according to AFP.
Now, the board, headed by ruling family member Sheikh Talal
Mubarak al-Sabah, has resigned because it contends the government
scrapped the deal because it wanted KAC to purchase the new
aircraft from the manufacturers directly instead of through a
leasing agent, according to Faisal al-Hajji, the state minister for
cabinet affairs.
KAC has repeatedly come under fire from members of parliament
with accusations of mismanaging public monies and has seen more
than $2 billion in losses in the past 17 years.
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