Jazeera Airways Acquires Sahaab Aircraft Leasing

Jazeera Airways has acquired Sahaab Aircraft Leasing, a private aircraft leasing firm established in late 2008, for KD25.6 million. The acquisition gives Jazeera Airways 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.

 Sahaab 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 other airlines, both regionally and globally. Sahaab will have a minimum fleet of 38 Airbus A320s by 2016 based on confirmed orders with the manufacturer.

 Sahaab was founded by the group of investors who established Jazeera Airways with the back up of a group of leading international financial institutions including DVB Bank, Natixis, and National Bank of Kuwait. Sahaab posted earnings of KD2.2 million in 2009; and projects earnings to reach KD4.6 million in 2010.

  “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,” said Jazeera Airways Chairman Marwan Boodai. “This acquisition is instantly accretive to Jazeera Airways, 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. As a result of this acquisition, Jazeera Airways will now be even more strongly capitalized to pursue its strategic aspirations, regardless of any prevailing market environment.”

 The acquisition, expected to be completed prior to 31 March 2010, will enable Jazeera Airways to consolidate Sahaab’s earnings beginning from 1 January 2010, adding an expected KD1.2 million in earnings in the first quarter of 2010. Funding will be completed through a rights issue in Q3 to existing shareholders, following customary government approvals.

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