Gov't clears Kuwait Airways' debt to ready for sale

Report says national carrier will also scrap major Airbus deal in favour of Boeing
Gov't clears Kuwait Airways' debt to ready for sale
Kuwait’s parliament first approved a plan to privatise the loss-making carrier in 2008 but the process has been repeatedly delayed.
By Courtney Trenwith
Sun 28 Jul 2013 11:30 AM

The Kuwaiti government has paid off KD441m ($1.55bn) worth of debt accrued by Kuwait Airways as it prepares to sell the national carrier.

Paying off the debt, accumulated since 2004, is seen as vital before the company can restructure itself towards privatisation.

Kuwait’s parliament first approved a plan to privatise the loss-making carrier in 2008 but the process has been repeatedly delayed.

The National Assembly only voted to support the sale in January.

Under the proposed plans, Kuwait will offer a 35 percent stake in the carrier to companies on the country’s stock exchange and to local or international firms, state media agency KUNA said last year.

The government will retain a 20 percent stake while 5 percent will be distributed to KAC employees. The remaining 40 percent will be allotted to citizens.

Meanwhile, Arabic daily Al Qabas reported the airline may turn its back on talks with Airbus for a deal to spend KD850m on 25 new Airbus jets, and instead go with rival Boeing.

It was reported in May that Kuwait Airways would also lease 13 more jets from Airbus to upgrade its ageing fleet and would start receiving the new aircraft in 2019.

But an anonymous source told Al Qabas that while the Airbus offer remained the preferred option, discussions were still ongoing with Boeing and no deal had been signed.

Five Kuwait Airways directors also reportedly resigned on Thursday. They were ground services director Izzat Al-Aryan, aviation services director Abeer Al Omar, financial director Sharifa Al Ibrahim, human resources director Waleed Al Heed, and internal auditory director Sami Al Menaei.

The men intended to stay until the end of the month but were reportedly told to leave immediately.

For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.