Government accepts Kuwait Airways board resignation

KUWAIT, Sept 10 (Reuters) - Kuwait's government accepted on Monday the resignation of the board of state-run Kuwait Airways Corp [KA.UL], embroiled in a dispute with parliament over a $3 billion plane order.

The state news agency KUNA said the Gulf Arab state's cabinet also asked acting transport minister Abdulwahed al-Awadhi to submit a report on the problems the airline faced.

The carrier late last month cancelled an initial order for 19 aircraft from Kuwait's Aviation Lease and Finance Co (ALAF.KW) (Alafco), saying parliament had refused to approve funding for the deal, worth about $3 billion.

The airline said a law that would allow it to borrow to finance its fleet renewal had yet to be approved.

The loss-making airline was ordering the new aircraft from a lessor rather than direct from the manufacturers because it wanted delivery between 2009 and 2014.

Alafco had already ordered Boeing Co (BA.N) 787s that Kuwait Airways wanted and would have been able to deliver sooner than the makers.

Kuwait is in talks with Boeing and Airbus (EAD.PA) about buying aircraft after the deal was scrapped, Kuwaiti newspapers said late last month.