Mubasher: Alafco Aviation Lease and Finance Company announced that it has excluded two Boeing B737-800 planes from its leasing contract with the Indian company Jet Airways, as the latter had failed to fulfill its obligations.

Alafco highlighted that the total value of the two planes amounts to $80 million (KWD 24.5 million) as per the posted value posted.

The said planes will be leased by the Indian company Air Vistara after it has won a tender offered by Alafco, according to a disclosure to Boursa Kuwait on Wednesday.

Alafco’s exclusion of the two planes will lead to a reduction in the future rental value, according to the disclosure.

Alafco further stressed that a value of $28 million worth of financial claims was submitted unto a directory that was appointed by the Indian government to consider all of the claims proposed by concerned parties with Gate Airways.

The Kuwaiti company noted that the current rental base of such models shall be determined by calculating 0.6 to 0.8% of the plane’s value announced as a monthly rental cost.

The financial impact of the deal cannot be disclosed as it may affect Alafco’s competitiveness in the industry, while it will reflect on the financial statements of the fourth quarter of fiscal year ended on 30 September 2019, and shall last for a period of three years starting from the date on which the planes have been delivered, Alafco remarked.

It is worth pinpointing that during the nine-month period ended on 30 June 2019, Alafco’s profits plunged by 58.2% to KWD 13.135 million, when compared to KWD 31.432 million in the corresponding period last year.