The Kuwaiti government, sole shareholder in Kuwait Airways (KU, Kuwait), could rescind a previous decision to offer a 35% stake in the national carrier to local private investment firms. Kuwait Airways is slated for privatization and under previous guidelines, government would have retained only a 20% stake with the remaining 80% to be distributed to local private equity (35%), Kuwait Airways employees (5%), while the remaining 40% would be allocated to Kuwaiti citizens.
However, according to the official KUNA news agency, Transport Minister Issa Al-Kandari's revised plan will now see the state retaining 75% of the airline's shareholding with citizens and airline employees to get 20% and 5% respectively.
During the proposal's reading in parliament last week, Kuwaiti MPs expressed concern at allowing a rival carrier, such as Jazeera Airways (J9, Kuwait), to partner Kuwait Airways stating it would create a conflict of interest. The budget carrier last week announced that it had submitted a formal Letter of Intent to government concerning its interest in the 35% shareholding.
Additional concerns stemmed from Kuwait Airways' valuation given that it now has ten B777-300ERs on order from Boeing (BOE, Washington National) and twenty-five A320neo and A350-900 aircraft on order from Airbus (AIB, Toulouse Blagnac) worth more than KWR2 billion (USD6.6 billion).
Parliament's Financial and Economic Committee are scheduled to vote on the proposal before it is finalised.
