Kuwait’s Jazeera Airways' board approved a $3.4 billion deal to buy 28 narrow-body aircraft from Airbus to expand its fleet across markets in the Middle East parts of Europe.
The deal included 20 A320neos and eight A321neos, the airline said in a statement on Sunday to Boursa Kuwait, where its shares are traded.
The board's approval follows a preliminary agreement signed by the companies at the Dubai Air show in November.
Jazeera Airways board also approved an agreement to buy two CFM LEAP1-A26 spare engines in a deal valued at $32.2 million.
“There is no immediate financial effect but both agreements are expected to have a positive impact in the medium and long-term,” Jazeera Airways said. Deliveries of the aircraft will be determined later.
The new aircraft will be used for the airline's expansion in the Middle East and mainland Europe, Rohit Ramachandran, the airline's chief executive, said last year.
Expansion in Saudi Arabia, Iran and the Commonwealth of Independent States are among the "low-hanging fruit" for growth, he said.
Airlines are reducing their cash burn and swinging to profit as coronavirus linked-movement restrictions ease.
Annual passenger traffic recovered to 42 per cent of 2019 levels in 2021 and cargo volumes rose 7 per cent from 2019, the International Air Transport Association said this month.
Jazeera Airways reported a net profit of 11.8m Kuwaiti dinars in the third quarter of last year on the back of higher revenue compared to a loss of 5.58m dinars during the same period in 2020.
The airline was also upgraded in January to Boursa Kuwait's Premier Market after it exceeded the minimum liquidity and market capitalisation requirements over the past two years.
“As the only company at Boursa Kuwait to offer investors access to the growing travel and aviation sector, the upgrade confirms the success of the company’s strategy and business model which positively contributes to the local economy,” Jazeera Airways chairman Marwan Boodai said this month.