KUWAIT Kuwait Airways KA.UL may delay a plan to buy 25 new aircraft from Airbus EAD.PA, a Kuwaiti newspaper reported on Monday, saying the state-owned carrier would prioritize leasing planes instead.
Kuwait Airways signed an initial agreement with Airbus in May to buy 15 A320neo narrow-body jets and 10 of Airbus's new A350-900 XWB, in the biggest overhaul of its fleet since the 1990 Iraqi invasion. It also agreed to lease a further 22 Airbus jets as part of the deal.
Under the plan, the new planes are expected for delivery in 2019.
Al-Qabas newspaper reported that Kuwait Airways' board of directors had decided on Sunday to separate the leasing and purchasing parts of the plan and would concentrate first on renting an initial 20 aircraft by April 2014.
Kuwait Airways declined to comment on the report. Airbus, owned by aerospace and defense group EADS, said the matter was for Kuwait Airways to comment upon and not Airbus.
The airline may reissue a separate tender for the leasing of the aircraft, al-Qabas said, citing unnamed sources.
Kuwait Airways may now consider bids for the rental contract from other companies such as Boeing (BA.N), the paper said, adding that Airbus was expected to still be given priority.
Kuwait Airways said in May it wanted to take out of service 11 jets from its old fleet of 17, in which the planes' average age is 18 years.
The airline signed the initial agreement with Airbus several months after Kuwait was awarded $500 million by Iraqi Airways for damage caused when former Iraqi President Saddam Hussein's forces seized aircraft and parts, ending a two-decade row over compensation.
(Reporting by Sylvia Westall and Ahmed Hagagy; editing by Tom Pfeiffer)