Jazeera Airways acquires Sahaab leasing for KD25m

The acquisition is expected to be completed before March 31. (EB FILE)

In a bid to increase profitability and facilitate growth in the next 24 months, budget carrier Jazeera Airways has fully acquired Sahaab Aircraft Leasing Company (Sahaab), a private aircraft leasing firm established in late 2008.

In a deal worth KD25.6 million (Dh324.78m), Jazeera Airways has, by the way of this acquisition, gained a platform to pursue strategic vertical integration initiatives lined up for 2010 and 2011 that include an airline acquisition and access to global leasing markets, the Kuwait Stock Exchange-listed carrier said in a statement.

It added that the acquisition, expected to be completed before March 31, will enable Jazeera Airways to consolidate Sahaab's earnings beginning from January 1, 2010, adding an expected KD1.2m in earnings in the first quarter of 2010. And funding will be completed through a rights issue in Q3 to existing shareholders, following customary government approvals.

"This acquisition will immediately boost Jazeera Airways' shareholder return on equity, and give our shareholders access to steady revenue streams as well as access to the global aircraft leasing industry, which is expected to experience long-term growth," Jazeera Airways' Chairman Marwan Boodai said in a statement, adding that the acquisition will help the airline be even more strongly capitalised to pursue its strategic aspirations, regardless of prevailing market environment.

Sahaab will have a minimum fleet of 38 Airbus A320s by 2016 based on confirmed orders with the manufacturer. It currently owns a fleet of nine Airbus A320s that were purchased and leased back to Jazeera Airways, and will continue to operate as a fully-owned subsidiary of the airline catering not only to Jazeera Airways but also to other airlines, both regionally and globally.

Sahaab was founded by the group of investors who established Jazeera Airways in strategic partnership with DVB Bank, Natixis Bank, and the National Bank of Kuwait.

 

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