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Press Dossier    By Date   29/01/2023 Kuwait Airways losses drop by KD 52m

Kuwait Times, Sunday, Jan 29, 2023 | Rajab 7, 1444

Kuwait Airways losses drop by KD 52m

Kuwait: 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 spare parts.

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.

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