Kuwait state-sponsored aircraft lease Alafco sales exploration – source

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DUBAI – Kuwait-headquartered airline leasing company Alafco is seeking a sale and has held talks with private equity firms and other airline leaseholders, sources familiar with the talks said.

Alafco, whose shareholders include the Government of Kuwait, has a 77 wide and narrow-body Airbus and Boeing aircraft operated by the airlines and a further 68 on order.

Alafco and major shareholder Kuwait Finance House did not respond to an emailed request for comment.

The potential sale comes when the lessee reported a 79% increase in the half-year loss amount to 4.5 million dinars ($ 14.71 million), which it blamed for the obstruction allegations.

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At the same time, Alafco’s lease revenue fell 2% to 51 million dinars (166.75 million).

Potential sales come as global airline leaseholders face inflation, high borrowing costs and the impact of Russia’s aggression on Ukraine.

Alafco’s customers include Air India, Indonesia’s Garuda, Malaysia Airlines, Kuwait Airways and Italy’s new carrier ITA.

Its average remaining lease term is 8.5 years, according to Alafco’s latest earnings presentation which predicts further consolidation among tenants without saying whether it will do so. ($ 1 = 0.3058 Kuwaiti Dinar) (Reporting by Tim Heffer, Alexander Cornwell, Saeed Azhar and Aziz El Yakubi, Editing by Lewis Heaven)

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