Airline privatisation faces second parliamentary defeat

11 January 2008
National carrier seeks third chairman in four months as Al-Sabeeh exits

Legislation approving the privatisation of Kuwait Airways faces another defeat in parliament as the airline enters a fresh man-agerial crisis.

Communications Minister Abdullah al-Muhailbi, whose remit includes transport, promised to present the privatisation bill to the National Assembly (parliament) again, after the legislature demanded a two-year postponement pending a full audit of the company (MEED 28:12:07).

But opposition to privatisation is entrenched, despite the airline’s beleaguered financial state - it has returned an annual profit only once in the past 16 years.

“We have to get parliamentary permission to go ahead with the privatisation but - there is strong opposition,” says a company official. “Many members [of parliament] have said they just do not want the airline to leave government control.”

Kuwait’s national carrier is seeking its third chairman in four months, after Barak al-Sabeeh resigned in the first week of January having become infuriated by the delays to privatisation. When Al-Sabeeh was appointed in late September, he said that privatisation should happen as soon as possible. He warned that without the private sector, Kuwait Airways would become unviable as a business, even if the government was able to save it from total collapse.

Al-Sabeeh’s resignation follows that of Sheikh Talal Mubarak Abdullah al-Ahmad al-Sabah in September 2007 (MEED 14:9:07).

“It is a problem,” says the official. “Sheikh Talal resigned, now Al-Sabeeh has resigned. We are getting no clear direction from the government.”

The government expects to appoint Al-Sabeeh’s replacement by the end of January.

Direct talks with aircraft manufacturers Airbus and Boeing over purchasing a new fleet have been suspended following Al-Sabah’s departure. Talks were due to reopen once the privatisation bill had been cleared by parliament. Neither Al-Sabeeh nor Al-Muhailbi were available for comment.

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