Kuwait City: Jazeera Airways on Monday announced that it had fully acquired Sahaab Aircraft Leasing Company (Sahaab), a private aircraft leasing firm established in late 2008, for 25.6 million Kuwaiti dinars (Dh325.4 million).
The acquisition gives Jazeera Airways a platform to pursue strategic vertical integration initiatives lined up for 2010 and 2011, which include airline acquisition plans and access to global leasing markets.
Sahaab currently owns a fleet of nine Airbus A320s that were purchased and leased back to Jazeera Airways. It will continue to operate as a fully-owned subsidiary of the airline and cater not only to Jazeera Airways but also other airlines, both in the region and globally.
Fleet size
Sahaab will have a minimum fleet of 38 Airbus A320s by 2016, based on confirmed orders with the manufacturer.
Sahaab was founded by a group of investors who established Jazeera Airways, with the backing of a group of leading international financial institutions that included DVB Bank, Natixis, and National Bank of Kuwait.
Sahaab posted earnings of 2.2 million Kuwaiti dinars in 2009. It forecasts earnings to reach 4.6 million Kuwaiti dinars in 2010.
Jazeera Airways chairman Marwan Boodai said: "As we implement our strategy to build Jazeera Airways into one of the leading regional airlines in the Middle East, this acquisition is the first in a series of vertical integration initiatives planned for 2010 and 2011 to drive growth and profitability for the airline through acquisitions, infrastructure investments and strategic partnerships."
Revenue streams
"This acquisition... will immediately boost 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," he added.
"As a result of this acquisition, Jazeera Airways will now be even more strongly capitalised to pursue its strategic aspirations, regardless of any prevailing market environment."
The acquisition, expected to be completed before March 31, will enable Jazeera Airways to consolidate Sahaab's earnings, beginning from January 1, 2010, into its own statements.
