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Jazeera bidding for stake in Kuwait Airways will be added value- analyst

Jazeera bidding for stake in Kuwait Airways will be added value- analyst
JAZEERA
JAZEERA
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Marwan Boody Chairperson of Kuwait's Jazeera Airways said earlier that the company is gearing up to compete for the strategic partner stake of 35% at Kuwait Airways.

in this context Analyst Saj Ahmad commented: “Kuwait Airways poses very little direct competition to the resurgent Jazeera Airways. Any bid for a stake by Jazeera in Kuwait Airways does two key things. It removes any direct competition since there would be a corporate basis for co-operation on routes that overlap and secondly, Jazeera would be able to tap into Kuwait Airways' international passenger base beyond the GCC region."

He pointed out that Kuwait Airways has been one of the slower moving GCC airlines when it comes to investment and strategy overhaul, but with orders in the pipeline for A320neo's, A350-900s as well as a mooted deal for 777-300ERs, this would represent good value for Jazeera to become a major stakeholder since much of the capital expenditure has already been accounted for.

Ahmad noted that the biggest challenge however remains - and that is to make Kuwait Airways a profitable entity.

Keeping in mind Jazeera had underwent recently downsizing to remain competitive and to keep steady growth.

Kuwait Airways privatization story was initially broke in 2013 as the Cabinet in Kuwait has passed a draft law to privatize the state carrier Kuwait Airways within next three years.

The state- run airline has been grappling financially to compete with its new rivals such as Qatar Airways and Emirates of Dubai.