Beirut: Kuwait Airways Corp, or KAC, is expected to make a loss exceeding 80 million Kuwaiti dinars (Dh1.04 billion or ($283 million) this year due to rising costs mainly related to salaries and maintenance expenses, Kuwait-based Al Seyassah daily reports Thursday, citing an executive.
KAC’s board has submitted studies to the cabinet about the way to operate and replace the airline’s fleet which would be put into action once the decree to convert KAC into a company is issued, Jasem Zainal, a member of KAC’s board, told the paper.
The plan includes replacing the fleet through lease-to-purchase contracts in order to revive the national carrier, and this can’t be achieved unless KAC is converted into a company under the supervision of Kuwait Investment Authority, he added.
Zainal blamed KAC’s troubles on the Kuwaiti parliament which had issued a law for privatising the carrier that included decisions forbidding it from purchasing aircraft or disposing of any of its assets. He had said in a media report in March that the airline hadn’t been profitable since its inception.
The Kuwaiti government decided to ground five of KAC’s aging aircraft in July due to malfunctions which resulted in many passengers cancelling their bookings for safety reasons, according to earlier media reports. The airline also witnessed earlier this year strikes by its workers who were asking for salary raises.
