Kuwaiti plane lessor Alafco postpones Airbus jet deliveries

The company will now make pre-delivery payments, due between this year and the next three years, from 2024 onwards

A rendering of an A320neo Alafco plane. Courtesy Airbus. 

Kuwait's aircraft lessor Alafco said it reached an agreement with Airbus to defer the delivery of jets ordered from the world's biggest plane maker, as the Covid-19 pandemic continues to damage the global aviation industry.

Under the terms of the agreement, pre-delivery payments that are due between 2020 and the next three years will be made from 2024 onwards, Alafco said in a filing to Boursa Kuwait on Wednesday.

The deferral is "in line with the latest developments in the aviation industry as a result of the spread of Covid-19", Alafco said.

The Covid-19 pandemic has hammered airlines, plane manufacturers, suppliers and lessors as it forced passenger air travel to a near-standstill. Plane leasing companies are offering payment deferrals to their cash-strapped airline customers who are forced to ground jets as demand for travel remains subdued.

Industry bodies and analysts say global air traffic will not return to pre-crisis levels before 2024.

Alafco did not specify the number or type of planes whose deliveries will be delayed under the new agreement. However, according to Airbus' orders and delivers schedule on its website, Alafco has 42 A320 Neos and 10 A321 Neos on order that have yet to be delivered.

"We don't comment on contractual agreements we have with our customers," Airbus said when contacted by The National for comments. "It's also the customer's privilege to announce delivery dates."

Alafaco, in its filing, said additional details cannot be disclosed due to confidentiality clauses in the agreement.

Earlier in August, Alafco said it will halve its planned 737 Max purchases after it reached an agreement to end its legal claim against Boeing over the order.

Alafco will now buy 20 Boeing 737 Max aircraft, down from an original order of 40, with revised delivery dates.

Alafco is 46 per cent owned by Kuwait Finance House, Gulf Investment Corporation controls a 14 per cent shareholding, Kuwait Airways owns 10 per cent and the rest is controlled by private investors, according to its website.