Kuwaiti government to retain veto on national airline
By: Courtney Trenwith
The Kuwaiti government will be issued a "golden share" when the national airline is privatised, giving it the power to veto all decisions on ‘strategic issues’, according to local media.
The long overdue sale of Kuwait Airways has been approved by legislators but no timeline has been announced.
Under new amendments to the privatisation plan, the government would continue to contribute to financing the purchase of new aircraft and would soak up all of the lost-making airline’s debt accumulated between 2004-12, estimated at more than KD440m ($1.55bn), Kuwait Times reported.
The government would be issued a ‘golden share’ in a deliberate move to make the company less attractive to strategic investors.
Chairman of the country’s low-cost airline Jazeera Airways, Marwan Boodai, told Arabian Business earlier this year he “definitely” would be interested in buying a stake in Kuwait Airways if it had a “clean, clear balance sheet”.
The privatisation has been held up due to the global economy, political instability and the airline’s restructure.
As part of the progress towards privatisation the carrier has been renamed Kuwait Airways Company (KAC) and is now operating on a commercial basis.
It has retained ownership of all assets and property of the airline, except for the outstanding $500m in compensation from the Iraqi government and Iraqi Airways related to Gulf War-era debts.
Under the plan, 35 percent of the new company will be sold to a local or foreign investor and 40 percent to citizens, while the government will retain 20 percent and give 5 percent to current and retired Kuwaiti employees.
Shares will not be sold until KAC becomes profitable, according to Kuwait Times.
The carrier is plagued by high salary costs and tough competition from other Gulf airlines.
Last month, the airline announced it would spend $3bn on 25 new Airbus jets and would lease a further 13 to upgrade its ageing fleet.