Kuwait's $3bn plane deal aborted

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Kuwait Airways' $3bn (£1.49bn) order for 19 planes from Aviation Lease and Finance Co (Alafco) has failed to meet government approval, said Alafco.

The deal "is considered cancelled", Alafco stated to Kuwait's stock exchange, after it received a letter from the national flag carrier.

The $3bn order included seven Airbus 320s and 12 Dreamliner 787 models.

Following the announcement, shares in Alafco - which is part owned by Islamic bank Kuwait Finance House - fell 7%.

"Alafco received a letter from Kuwait Airways saying it has not obtained the necessary government approval to sign a final deal with Alafco," said the stock exchange statement.

Under the initial agreement signed in June, the planes were meant to be delivered between 2009 and 2014.

Kuwait Airways placed the order to replace and improve its existing fleet.