Kuwait Airways Continues Its Long Road To Privatization

Just over five years ago, back on the 9th of January 2008 Kuwait’s National Assembly approved the privatization of Kuwait Airways … and if this line sounds familiar, it is because I wrote it word for word on the 5th of May 2011 … now on the 23rd of January 2013 Kuwait’s National Assembly approved an Amiri Decree for the Kuwait Airways Corporation to be transformed into shareholder owned corporations. In a vote by Members of Parliament and The Cabinet, with 29 yay, 9 nay and 6 abstaining, the airline should be able to move forward towards not only becoming privatized, but also towards becoming a competitive airline in the region.

 

Between 2009 and 2013 Kuwait Airways lost nearly US$373,000,000 and borrowed more than US$635,000,000 leaving airline in financial dire straits, with an aging fleet and a dwindling route network, but through privatization the airline hopes to quickly turn the nose diving carrier around. The total estimated losses the airline faces since 2004 are nearly US1,600,000,000, which the government needs to cover as the airline was, and presently remains, owned by The State of Kuwait.

 

Following Wednesday’s approval of the Amiri Decree, Sami Al-Nasef, Chairman of Kuwait Airways, announced the airline is interested in purchasing 20-to-21 new aircraft, with an even mix between narrow-bodies and wide-bodies. Presently 5-to-7 of the airline’s 17 aircraft are not flight worthy, so new aircraft cannot arrive quick enough.

 

Kuwait Airways is surrounded by major competitors, and growing competitors, from here the airline will either get past its internal political and labour issues to grow and compete or be crushed.

 

All anyone can do now is watch and wait to see what happens.

 

Happy Flying!

 

@flyingwithfish

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  1. The privatization of KU is an ongoing issue. The most difficult problem is labor issues and organizational restructuring. KU has failed to recover since the 1990 Gulf War sort of lost the will to bounce back. Even with a new fleet, the road to profitability and privatization is long and difficult.

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