KUWAIT (Reuters) - Kuwait’s parliament approved an amended draft law on Wednesday paving the way for the long-overdue privatisation of Kuwait Airways, state-run news agency KUNA reported.
Parliament first backed privatising loss-making Kuwait Airways Corp KAC.L in 2008 but the process has been repeatedly held up by the global economic crisis, political turmoil and a restructuring at the airline.
Under the draft law, the carrier will change its name to Kuwait Airways Company and own all assets and property of KAC, except for outstanding payments from the Iraqi government and Iraqi Airways, KUNA said.
Iraq and Kuwait agreed last year that Baghdad will pay $500 million in compensation for Gulf War-era debts. The cash will go to the state treasury, not KAC, the report said.
The Kuwaiti carrier faces challenges such as high labour costs, an aging fleet and tough competition from other Gulf airlines, Communications Minister Salem al-Athaina said, according to KUNA. He did not give a timeline for the privatisation process.
Under a plan approved by the cabinet in April the government will offer a 35-percent stake to companies listed in Kuwait and to “specialised” local or international firms within three years.
The government would retain 20 percent with 5 percent to be distributed to KAC employees.
The remaining 40 percent would be allotted in the same way to citizens registered with the Public Authority for Civil Information, the Kuwaiti body that issues civil identity cards. (Reporting by Sylvia Westall; Editing by David Cowell)