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.
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.