Kuwait Times, Sunday, Jan 29, 2023 | Rajab 7, 1444
Kuwait Airways losses drop by KD 52m
Kuwait Airways will acquire the “T4” building after renting it out for about KD
1 million annually, said Captain Ali Al-Dukhan, chairman of the board of
directors at Kuwait Airways Company (KAC) during a press conference held by the
company to announce its 2022 financial results. The terminal (T4) is currently
operated by a Korean company until August 2023. Kuwait’s national airline will
then move to “T4” after the Korean company’s contract ends, said Al-Dukhan. He
added that he hopes the investment returns of the T4 building will bring Kuwait
Airways closer to reaching the expected break-even point in 2024.
KAC losses dropped from KD 107m in 2019 to about KD 55m in 2022, Al-Dukhan
announced. Revenues, on the other hand, climbed by 10 percent compared to 2019
and 115 percent compared to 2021. The profit margin also improved by 40 percent
compared to 2019 and 37 percent compared to 2021. Passenger traffic at “T4” grew
by 26 percent during 2022 compared to 2019 and to 229 percent compared to 2021.
Kuwait Airways received three new aircrafts in 2022: One Airbus “A320NEO” and
two Airbus “A330NEO”, added Al-Dukhan. The airlines also launched new
destinations, including Manchester, Madrid, Casablanca, Trabzon, Mykonos, Kuala
Lumpur and Hyderabad. It was also committed to flight departure timings 86
percent of the time, achieving third place in the Middle East and North Africa.
KAC plans to achieve a commitment of up to 90 percent and will soon be flying to
new destinations: Athens, Antalya, Taif, Qassim, Al-Ula, Barcelona, Budapest and
Berlin. Al-Dukhan expected a growth in passenger traffic by nearly 4.5 million
passengers in 2023 and an increase in operations by more than 30 percent.
Soaring fuel prices cost KAC about KD 130m annually. The company plans to tackle
that, said Al-Dukhan, by asking the government to obtain higher discounts.
Adding new aircrafts to the company’s fleet in 2024 will also save 50 percent of
the fuel costs. One of the most important achievements made by KAC in 2022 was
the restructuring of the aircraft deal with “Airbus,” as it raised the volume of
a previous order from “Airbus” from 28 to 31 aircrafts in a deal worth $3bn.
Other achievements include: The completion of the maintenance contract with Air
France and Rolls-Royce, the approval of the establishment of the Kuwait Airways
Training Academy, the signing of a mutual business partnership with Air Europe
and Eta Airlines and transporting 14,000 passengers to Doha to attend the 2022
World Cup matches in Qatar. Al-Dukhan said the company also trained 100 high
school students and university students and graduates, participated in the
Balsam project with the Kuwait Red Crescent Society, donated 100 wheelchairs to
the Ministry of Health and took part in the design and construction of the
“Kuwaitia Tower” that took place on Al-Hilali Street.
Regarding the deal of selling “Alafco” assets, in which Kuwait Airways owns nine
percent of its capital, Al-Dukhan said that Kuwait Airways first opposed the
deal, but Alafco’s largest owners decided to go with it. Al-Dukhan said the
procedures through which the deal was completed were “deficient”. KAC is working
to reduce its expenses related to aircrafts and manpower, said Maen Razouqi, the
CEO of Kuwait Airways, pointing out that the company was surprised in 2022 that
fuel prices grew by about 30 percent. The increase in the discount rate during
the past year from 1.5 to 3.5 percent also raises the cost of services that
other companies provide to KAC such as operational services, maintenance or
Razouqi said that while the company is looking to reach the break-even point in
2024 and start positive results in 2025, it is facing a delay in receiving new
aircrafts ranging between four and six months. The delay raises costs,
especially since the new “NEO” aircraft reduces fuel costs by 15 percent
compared to current aircrafts. Razouqi added that the company is currently
working on preparing its strategy for the year 2030, to be completed during the
first quarter of this year, revealing that it sold one of its Boeing 777
aircrafts, which will go to its new owner in less than a month. Kuwait Airways
also expects to sell three Airbus 340 aircrafts by the middle of next summer.