Kuwait aircraft lessor cuts purchases as virus weighs on travel

Kuwait’s Aviation Lease & Finance Co. has pared back its plans for plane purchases over the next three years as the travel industry struggles to recover from the pandemic-induced slump.

Alafco, as the company is known, said it would reduce aircraft commitments over 2020-2023 through a combination of cancellations and deferrals to boost its liquidity position and save on costs.

Countries around the world were forced to shutter airports last year to prevent the spread of the coronavirus. Alafco agreed with Airbus to defer aircraft delivery in August, citing the impact of the pandemic, and cut its orderbook with Boeing Co. after ending a legal claim.

The leasing firm is now identifying further cost-saving measures, and has formed a committee to help review and negotiate rent deferrals or waiver requests. It’s also working to collect rent from delinquent lessees and restructure contracts, Chairman Ahmad Al Zabin told Bloomberg.

Alafco continues to divest aircraft that fall short of fuel efficiency and revenue criteria. The company said it has a young fleet with an average age of just over four years, and a pipeline of new generation planes to support airlines as they switch to fuel-efficient planes.