Dubai Airshow: Kuwait's Jazeera Airways orders 28 Airbus A320 Neo jets

The deal is worth $3.4 billion at list prices, according to the airline's filing on the Kuwait bourse

Kuwait’s Jazeera Airways placed an order for 28 narrow-body Airbus A320 aircraft during the Dubai Airshow, after hammering out details of the deal in the last minute.

The budget airline signed an initial agreement with the Toulouse-based plane maker for 20 A320 Neos and eight A321 Neos, with an option for an additional five jets, on Tuesday, the third day of the air show.

The deal is worth $3.4 billion at list prices, Jazeera Airways said in a filing to the Kuwait bourse.

"We are very, very pleased to be able to sit here with a big smile on our face, and a little bit of sweat on our forehead, but fundamentally a great smile – who says deals don't get done at air shows?" Christian Scherer, chief commercial officer of Airbus and head of Airbus International, said.

The order marks the next phase of Jazeera's Airways' evolution, Rohit Ramachandran, the airline's chief executive, said.

"We believe now is the right time to evolve, grow and invest in the future," he said. "We have been in discussions with Airbus for what we consider a realistic, modest and easily digestible order for Jazeera."

Deliveries of the aircraft will begin in 2026 and will be used for the airline's expansion in the Middle East and mainland Europe, Mr Ramachandran said.

Expansion in Saudi Arabia, Iran and the Commonwealth of Independent States are among the "low-hanging fruit" for growth, he said.

The airline will fly to five more routes in the kingdom in the next 12 months, on top of the five it currently serves, while Iran "presents good opportunities".

CIS countries will be an area of focus to develop new traffic in Baku, Tbilisi, Bishkek and Almaty. It also expects to start services to Manchester and Birmingham in the next six months, adding to its current service into London Heathrow.

The new aircraft will help to reduce carbon emissions by delivering fuel savings of up to 18 per cent, compared with older A320 models, he said.

Jazeera Airways has 16 aircraft in its fleet, with the 17th jet set to be delivered in two weeks. The new aircraft will partially replace older A320 models in its fleet.

"In maturity, I believe Jazeera will have a fleet size of 30 to 35 planes and we believe that is a reasonable and digestible size for a base carrier in Kuwait. Anything more would be in the realm of science fiction," Mr Ramachandran said.

Jazeera Airways, which had been mulling a new jet order from either Airbus or Boeing for years, said now was the right time to place the order as it seeks to expand its operations to tap into a gradual sharp rise in air travel after the pandemic.

"We believe now we are through with what we consider to be the worst of the effects of the pandemic," he said. "And we need to now be decisive."

The last-minute negotiations of the deal encompassed the timetable of the plane deliveries.

"We would like to take deliveries sooner. We understand the supply chain constraints with Airbus," he said. "We are enthusiastic and hopeful that we might be able to expedite if possible."

Quote
We believe we are through with what we consider to be the worst of the effects of the pandemic. And we need to now be decisive.
Rohit Ramachandran, chief executive of Jazeera Airways

Airbus will stand by Jazeera to identify and provide support when they opportunities to hasten its deliveries, Mr Scherer said.

The airline will look into the selection of the engines to power the new aircraft and will invite proposals.

"We will, once the dust settles on this particular high-value transaction, have to initiate a tender process for power plants as well and we have very good relationships with CFM and Pratt & Whitney, which are the two engine manufacturers for the aircraft types," Mr Ramachandran said.

"I look forward to an enthusiastic process on the part of both power-plant manufacturers as we go through the months ahead."

The deal marks Airbus' third major announcement at the Dubai Airshow, the biggest aerospace exhibition since the onset of the Covid-19 pandemic.

It won major orders for narrow-body jets from Indigo Partners and won an order for seven of its new A350 freighter aircraft from US leasing company Air Lease Corporation amid booming demand for air cargo.

Updated: November 16th 2021, 12:40 PM
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