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Kuwait Parliament approval granted for KAC privatization

The National Assembly (Parliament) in Kuwait has granted approval to the government to begin the privatization plan for the struggling national carrier, Kuwait Airways Corporation (KAC).

The parliament endorsed and referred to the government an amended draft law, thereby making way for privatization of the loss-making state-owned company.

Under the new law, the name of the carrier will be changed to ‘Kuwait Airways Company’, and will remain a shareholding firm, which would consequently own all assets and properties of KAC, except for its dues on Iraqi government and Iraqi Airways.

The KAC’s dues on Iraqi Airways and government will return to the state treasury, the bill stated. The bill also stipulated that the new company has no right to abandon or assign any of KAC’s concessions, tariff exemptions and other advantages or rights. The new firm has to abide by the still valid contracts with other entities.

The government will bear the responsibility to cover all losses experienced by KAC in the past years. The KAC employees, who do not wish to work for the new company, or be re-assigned to the government, will offer a three-year salary pay-off.

The legislation added that the communications minister will appoint seven-member board to run the firm for a renewable term of three years. The Minister will also name the Board Chairman.

Kuwait Investment Authority Board will be responsible for all regular and extraordinary general assembly of KAC.

The Communications Minister and Minister of State for Housing Affairs, Salem Mutheeb Al-Utheina, emphasized the necessity to help KAC turn into a profit-making company.

Al-Uthenia agreed that Kuwait Airways faces several challenges, including high labour costs, aging fleet and stiff competition from other Gulf carriers.

The Minister said that HH the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah wants to turn Kuwait into a regional, financial and commercial hub, and the role of airlines in achieving this goal is clear, the Minister said.

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