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LCDFlight
Posts: 440
Joined: Wed Jan 01, 2020 9:22 pm

Re: Kuwait Airways lost an avg. of $17M for "every" aircraft in its fleet (for its financial year)

Mon Jan 27, 2020 7:26 pm

Sorry I posted this message in the wrong thread before.

Kuwait does not really have business flying widebodies. It would be logical IMO to focus on A320 and A321 aircraft. They can access LHR and PEK (for example) using that type of fleet. Widebodies require a magnitude of traffic that Kuwait does not have. There is nothing wrong with being a wealthy, small principality, so it is best served with a smaller airline operation.
 
Skyguy
Posts: 507
Joined: Sat Feb 28, 2004 1:55 am

Re: Kuwait Airways lost an avg. of $17M for "every" aircraft in its fleet (for its financial year)

Mon Jan 27, 2020 7:59 pm

Having a little more knowledge about KU after having dealt with their HQ and visited them in the past, it's actually surprising that several of their routes actually do make decent profit, it's not like they are buying needless aircraft all the time and trying to find places to fly them to. Kuwaiti's are quite loyal to their local airline and do patronize them and they also have strong demand from those countries where they have a lot of migrant labor traveling. What leads to KU having $17m loss per aircraft is in fact what someone above mentioned is their absolutely bloated overhead structure. They have too many people on their payroll. Their accounting and finance department alone is as large as EK, and the vast majority of whom are local Kuwaitis who have been given jobs just to keep them from being unemployed. They earn unrealistically high salaries and combined with a poor work ethic and education, are not exactly significantly contributing towards the airlines success. If it wasn't for this gargantuan payroll and too many people being employed, KU would have a cost structure not too dissimilar to other successful Middle Eastern airlines.
So we can go into lengthy discussions about the merits and follies of their aircraft purchases and the economics of the routes they fly, but the prime reason for their Biblical losses is the chronically high and overpaid employees they have. Other contributors are also the fancy and unneeded equipment purchases, infrastructure etc. but these pale in comparison to their payroll.
"Those who talk, do not know, and those who know, do not talk."
 
airway1
Posts: 150
Joined: Wed Apr 23, 2014 6:02 am

Re: Kuwait Airways lost an avg. of $17M for "every" aircraft in its fleet (for its financial year)

Tue Jan 28, 2020 2:00 am

LCDFlight wrote:
Sorry I posted this message in the wrong thread before.

Kuwait does not really have business flying widebodies. It would be logical IMO to focus on A320 and A321 aircraft. They can access LHR and PEK (for example) using that type of fleet. Widebodies require a magnitude of traffic that Kuwait does not have. There is nothing wrong with being a wealthy, small principality, so it is best served with a smaller airline operation.



I am surprised you think Kuwait does not need widebodies. I think you would need to fly here to see the demand for travel! A few airlines fly widebodies to Kuwait (Emirates, Qatar, Egypt Air, Turkish and others). If they flew 320s or 321s to London no one would fly them! Around 400,000 fly to London and back every year that would need. 4 320s daily if not more. At 16 million passengers this airport is not small. You do know we have 4.5 million people living in Kuwait so its not a Monaco that’s for sure :)

The issue is the staff numbers, discounts given to certain industries and to staff for travel (even for families of staff). Ive been on flights where most passengers on premium are flying free which is crazy. KU has a great terminal it flies from, newer planes and a loyal following.
 
LCDFlight
Posts: 440
Joined: Wed Jan 01, 2020 9:22 pm

Re: Kuwait Airways lost an avg. of $17M for "every" aircraft in its fleet (for its financial year)

Tue Jan 28, 2020 3:05 am

Interesting comments. Yes, maybe LHR needs a couple widebodies due to slot constraints. My guess would be A332 might work. I see ego driven fleet decisions. Kuwait has lots of money without a doubt. The government can do as they like. I am suggesting how to lose less money in airline operations, but maybe they want to have too many staff and a flashy fleet. They can do that if those are their priorities. No doubt the Kuwait market CAN fund a very decent home airline at a profit. I’m not dismissing that. Just an amateur a.net reader I don’t have special knowledge
 
Antarius
Posts: 2149
Joined: Thu Apr 13, 2017 1:27 pm

Re: Kuwait Airways lost an avg. of $17M for "every" aircraft in its fleet (for its financial year)

Tue Jan 28, 2020 3:47 am

cedarjet wrote:
Antarius wrote:
strfyr51 wrote:
So? Exactly what lesson would that be? If those hubs were such a great loss? then other carriers would have been on them like hot cakes! United De-hubbed CLE many years ago S-CO had it as their Hub, But they Merged with UA and the Hub became a Moot point in favor of ORD, STL was TWA's Hub before the merger with American.
American didn't keep the hub as it didn't for into their plans. If those Hubs were all That? Then JBLU, WN, AS F9 or NK might have swooped in there and made a killing. BUT? They didn't and probably won't. Why? Because they need a deep pocket major to prime the pump in passengers so they might go in and try to skim some of the cream.
But they're NOT going in to make the investment themselves... Are they?


You managed to completely twist my point into the exact opposite of what I was saying.

The message is that connecting hubs with little O&D traffic like CLE and STL are not sustainable. KWI is basically a CLE, trying to build a giant connecting hub there will fail, especially with EK nearby and QR seemingly with unlimited pockets.

KU aren’t trying to build a connecting hub. They’ll accept transit passengers as a subsidy but the airline is not run for commercial gain, its to safely fly people in and out of Kuwait for business etc, and to provide a retirement home for ex military officers and minor princes who are too dumb or venal to be trusted with a gig at the offices of the sovereign wealth fund. Anyone who thinks they’re trying to compete with Emirates is out of their mind.


There are far better ways to go about this than KU is. They definitely seem to act with delusions of grandeur, almost a Napoleon complex. Yes KWI is Rich, but not quite to the level of their neighbors.. hence aforementioned complex.

Basically, if this is a make work program, they're not doing a very good job at that either. May as well just cut them checks and keep a small fleet of Gulfstreams running the princes around.

At least that's been my experience while there. It's a runt mentality that drives a lot of things.
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ewt340
Posts: 1246
Joined: Tue Jul 10, 2012 7:22 pm

Re: Kuwait Airways lost an avg. of $17M for "every" aircraft in its fleet (for its financial year)

Tue Jan 28, 2020 4:13 am

cedarjet wrote:
ewt340 wrote:
B777LRF wrote:
The purpose of KU never was, and never will be, making a profit. It's a political animal created to secure lines of communication which is 100% under the control of the ruling family. It's also a vehicle for employment of well-connected, and sometimes not so well-connected, locals. Also used to maintain international relations via the purchase of high-value items, such as aircraft, simulators and engines. And, last but not least, like it's brethren airline on a small island to its south, utilised by staff as a fantastic generator of wasta.

Kuwait is swimming on an ocean of oil and gas, and their sovereign wealth fund is so flush with cash it's almost ridiculous. Money, as they say, is not an object.


Well at some point, losing such amount of money for every single aircraft they owned would be to much for them.

I guess the only thing they could do is to use more efficient smaller aircraft to minimize the lost and increase load factor.

You need to reread the post you’re replying to. The national airline losing a few mill is a rounding error for Kuwait.


Uhmm, I know that. Unless you got every single data for each aircraft they own that lose or make money, then there's not much we could discussed here.

At the end of the day, they are still losing money. Just because 10 B777-300ER makes tons of profit doesn't mean much when they are still losing tons of money on other aircraft which resulted in net loss at the end of the year.
 
Toinou
Posts: 257
Joined: Sun Apr 14, 2019 8:21 am

Re: Kuwait Airways lost an avg. of $17M for "every" aircraft in its fleet (for its financial year)

Tue Jan 28, 2020 6:47 am

Skyguy wrote:
Kuwaiti's are quite loyal to their local airline and do patronize them and they also have strong demand from those countries where they have a lot of migrant labor traveling.


airway1 wrote:
The issue is the staff numbers, discounts given to certain industries and to staff for travel (even for families of staff). Ive been on flights where most passengers on premium are flying free which is crazy. KU has a great terminal it flies from, newer planes and a loyal following.


I'm wondering. Some well informed people here talk about the local customers loyalty but also about many passengers travelling for free or very low prices. So, how much of this loyalty would resist to a normal fare structure? This is not ironical of me, I am really wondering about this aspect.
 
deltatrav
Posts: 39
Joined: Tue Oct 02, 2018 6:33 pm

Re: Kuwait Airways lost an avg. of $17M for "every" aircraft in its fleet (for its financial year)

Fri Apr 10, 2020 7:10 pm

Any update on delivery dates? I know 5 a350's canceled, but wondering about the others. Any ideas on routes - maybe JFK?
 
deltatrav
Posts: 39
Joined: Tue Oct 02, 2018 6:33 pm

Re: Kuwait Airways lost an avg. of $17M for "every" aircraft in its fleet (for its financial year)

Fri Apr 10, 2020 8:56 pm

I suppose even the A330-8neo could do even JFK, but unlikely to be used given its small premium cabin
 
cbphoto
Posts: 1255
Joined: Sat Dec 20, 2003 6:23 am

Re: Kuwait Airways lost an avg. of $17M for "every" aircraft in its fleet (for its financial year)

Fri Apr 10, 2020 9:20 pm

juliuswong wrote:
Spiderguy252 wrote:
Doesn't matter - they have a couple of oil wells to back up their dumb decisions.

Refreshing their fleet from the battered A300/A310s this decade wasn't a bad call.

I notice 3 x A320s in a hybrid Kuwait - Allegiant livery. What are those about? As things stand, I might end up on one of those on my upcoming DEL-KWI-DEL run - the product will surely be inferior than on KU's owned A320s?

Allegiant for some reason rejected the lease for some ex-SV A320. Thereafter went to Kuwait Airways. 9K-ALE, 9K-ALF and 9K-ALG.


Allegiant rejected them due to the fact they took almost twice as long in induction then other Airbus’s. The SV planes had lots of issues, including parts that were installed that neither Airbus, Allegiant or the FAA knew what they were. Frankly I’m surprised those airbuses did not go straight to the scrapper.
ETOPS: Engines Turning or Passengers Swimming
 
behramjee
Posts: 5071
Joined: Sat Aug 02, 2003 4:56 am

Re: Kuwait Airways lost an avg. of $17M for "every" aircraft in its fleet (for its financial year)

Fri Apr 10, 2020 9:42 pm

deltatrav wrote:
I suppose even the A330-8neo could do even JFK, but unlikely to be used given its small premium cabin


no it cannot departing KWI at 0900am in summer season when its 44c average on the ground.

even the B77W has payload issues at times in the summer departing KWI for JFK.

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