Jazeera Airways to bid for stake in Kuwait Airways

Jazeera Airways is preparing to submit a bid for a sizeable stake in rival Kuwait Airways once the carrier's privatisation process has been put in motion, reports Reuters.
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Analyst Saj Ahmad commented: “Kuwait Airways poses very little direct competition to the resurgent Jazeera Airways. Any bid for a stake by Jazeera in Kuwait Airways does two key things. It removes any direct competition since there would be a corporate basis for co-operation on routes that overlap and secondly, Jazeera would be able to tap into Kuwait Airways' international passenger base beyond the GCC region.” 

He added: “Kuwait Airways has been one of the slower moving GCC airlines when it comes to investment and strategy overhaul, but with orders in the pipeline for A320neo's, A350-900s as well as a mooted deal for 777-300ERs, this would represent good value for Jazeera to become a major stakeholder since much of the capital expenditure has already been accounted for. The biggest challenge however remains - and that is to make Kuwait Airways a profitable entity. Given Jazeera's own downsizing to remain competitive and its tempered growth approach today, it remains to be seen if Jazeera really has the capability to change Kuwait Airways for the better.”