Interpreting Middle East Economic News and Analyzing Market Trends

Kuwait’s dysfunctional parliament is at it again, this time attempting to kill Airbus deal with Kuwait Airways

Kuwait Airways

Kuwait can’t seem to catch a break.  Every time a major project or deal is announced, the Gulf’s only elected officials step in to mess it up… all in the name if protecting the country.  This time, parliament is sticking its feet in the mud again by getting involved in the $4.4 billion Airbus deal to sell 25 aircraft to Kuwait Airways.

kuwait-international-airport

Kuwait Airport’s current terminal opened in 1980 and is in serious need of a makeover

A parliamentary investigation into a Kuwait Airways plan to buy and lease aircraft from Airbus will not affect the deal, the state carrier’s chairwoman told a local newspaper in comments published on Sunday.

Kuwait’s parliament voted on Wednesday to investigate all contracts signed by state-owned Kuwait Airways, which is attempting its biggest overhaul since the 1990 Iraqi invasion.

Such parliamentary inquiries are common in Kuwait, where lawmakers in the Gulf state’s National Assembly often question large government projects and have delayed or scuppered them in the past.

Al-Anba newspaper quoted Kuwait Airways Chairwoman Rasha al-Roumi as saying the deal would be completed without being delayed.

In December the loss-making airline signed a provisional agreement with Airbus to buy 25 new aircraft in a deal worth $4.4 billion at list prices.

The order would include the purchase of 10 A350-900 and 15 medium-haul A320neo jets. The airline also aims to lease 12 aircraft from Airbus pending delivery of the new planes.

The two companies are now going over technical and legal aspects of the deal, Al-Anba said. A final contract will only be signed when an internal Kuwait Airways commission gives the green light, it added.

A Kuwait Airways spokesman was not immediately available for comment on the report.

Politics and bureaucracy have long complicated Kuwait’s plans to modernise its infrastructure and compete as a Gulf financial hub.

The carrier has one of the oldest fleets in the Middle East and wants to take out of service 11 jets from its fleet of 17, in which the planes’ average age is 18 years.

Read the full story from Reuters.

longtermparking Parking at the airport is usually a problem. Planners in the late 1970s did not envision so many cars on the roads back then.

Since the first Gulf War in 1991, Kuwait has struggled to privatize, modernize and keep up its aging infrastructure.  Anyone visiting Kuwait would be shocked at the poor condition of the infrastructure, especially for such a wealthy country.  The truth is the government can’t seem to get its act together.  Not only is Kuwait Airways in bad shape, the airport has been outdated for decades, the roads are congested with no sign of any solution and buildings are crumbling.  The quality of healthcare and education are also in bad shape.  Compared to Abu Dhabi, Doha or Dubai, Kuwait is a basket case.

Kuwait City Traffic

Traffic in Kuwait is getting worse every year with no solution in sight

For Reuters to even mention that Kuwait wants to compete to be a hub for anything in the Gulf is laughable.  It lost its chance over 10 years ago when the rest of the Gulf was just waking up.