Kuwait’s Alafco agrees to purchase 20 Boeing 737 Max jets in $2.2bn deal

Aviation Lease of Kuwait and Finance Company (Alafco) agreed to buy 20 additional single-aisle Boeing 737 Max 8 jets in a US$2.2 billion deal that doubles its order book for the aircraft.

Alafco, which provides commercial aircraft leasing products globally, now has 40 Boeing 737 Max on order, it said on the second day of the Dubai Airshow.

The deal is valued at $2.2bn at current list prices before discount. The 737 Max family, a favorite of low-cost carriers, has operating costs about 8 per cent lower than its main competitor, Boeing said.

“Our customers rely on fuel efficiency, reliability and low operating costs to be successful and the 737 Max aircraft will meet the needs of our customers and support Alafco’s future growth,” said Adel Albanwan, deputy chief executive of the leasing company.

Boeing Commercial Airplanes president and chief executive Kevin McAllister added: “The 737 Max 8’s ability to fly further than the competition while using less fuel is one of many reasons why customers – including Alafco – have helped make the 737 Max the fastest-selling airplane in Boeing history.”

The 737 Max has surpassed 4,000 total orders to date, Boeing added.

Boeing, the world’s largest aerospace company, forecasts airlines in the Middle East will need 3,350 new aircraft over the next 20 years, valued at an estimated $730bn. Competing Airbus, based in Toulouse, forecasts Middle East carriers will spend about $600bn on new aircraft over the coming two decades, amid projections that the fleet size of the region’s carriers will more than double over the period.

“The fact that 85 per cent of the world’s population lives within an eight-hour flight of the Arabian Gulf, coupled with robust business models and investment in infrastructure, allows carriers in the Middle East to channel traffic through their hubs and offer one-stop service between many cities,” said Randy Tinseth, vice president of marketing at Boeing Commercial Airplanes.

The region is forecast to experience the fastest growth rate in the world behind Africa, which is projected to grow by 5.9 per cent to 400 million passengers by 2036, according to the International Air Transport Association.