We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Sun 12 Jun 2005 04:00 AM

Font Size

- Aa +

Kuwait Airways stays in the red

KUWAIT’S parliament has projected a deficit of almost US$100 million for its struggling national carrier this year.

KUWAIT’S parliament has projected a deficit of almost US$100 million for its struggling national carrier this year.

The prediction came as the government approved the budget for Kuwait Airways, which has spent 15 of the last 16 years in the red. Expenditure for the fiscal year that started on April 1 is estimated to reach US$859 million, while the airline's revenues are projected at US$770 million, giving a deficit of US$80 million.

According to figures recently disclosed by chairman and managing director Sheikh Talal Mubarak Abdullah Al Ahmed Al Sabah, the state-owned airline generated total revenue of US$770 million in 2004-5. MPs also approved the airline’s final accounts for seven years, which had been held back over allegations of mismanagement, paving the way for an injection of US$790 million in government aid. The aid represents about 66% of the carrier’s capital of US$1.2 billion.

In March last year, parliament’s finance and economic panel approved a government-sponsored bill to transform Kuwaiti Airways into a public company as a first step toward full privatisation. The bill has not yet been discussed by the 50-member elected house.

Furthermore, competition in Kuwait’s domestic aviation market is set to increase after the government opened up the sector by allowing three private airlines to operate. The first airline Al Jazeera, a low-cost passenger carrier, plans to start operations in October after ordering four new Airbus A-320 planes. The other two, one for cargo and the other a full passenger airliner, are still under establishment.

Meanwhile, Iraqi Airways has announced that, by the middle of the month, it hopes to add routes to Turkey; Lebanon; Cairo, Egypt; Dubai, United Arab Emirates; Kuwait and Iran. The airline resumed international flights last September for the first time in 14 years, with services to Amman, in neighboring Jordan and to the Syrian capital of Damascus.

It inaugurated a route from Baghdad to the southern city of Basra last week — part of an expansion plan that also involves extreme security measures at the capital, Baghdad’s airport.

Arabian Business: why we're going behind a paywall

For all the latest business 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.

Read next