(MENAFN - Kuwait News Agency (KUNA)) Kuwait's National Assembly (parliament) gave on Wednesday the green light to the government to start an overdue privatization plan for the struggling national carrier Kuwait Airways Corporation (KAC).
After heated deliberations, the parliament endorsed and referred to the government an amended draft law paving the way for the privatization of the loss-making state-owned company.
The bill was passed by 29 votes in favor to 9 against, with 6 abstentions.
According to the new legislation, the carrier will change its name to Kuwait Airways Company and be a shareholding firm which would consequently own all assets and properties of KAC, except for its dues on Iraqi government and Iraqi Airways.
The KAC's dues on Iraqi Airways and government will return to the state treasury, the bill stated.
It also stipulated that the new company has no right to abandon or assign any of KAC's concessions, tariff exemptions and other advantages or rights. The new firm has to abide by the still valid contracts with other entities.
The government will cover all losses experienced by the KAC in the past years.
Moreover, the KAC employees who do not want to work for the new company or be reassigned to the government would be offered a three-year salary pay-off.
The legislation added that the communications minister will appoint a seven-member board to run the company for a three-year renewable term. The
minister will name the board chairman.
Kuwait Investment Authority Board will be in charge of the tasks of KAC's regular and extraordinary general assemblies.
For his part, Minister of Communications and Minister of State for Housing Affairs Salem Mutheeb Al-Utheina underscored the necessity of the move to help KAC turn into a profit-making company.
Al-Uthenia admitted that Kuwait Airways faces several challenges, including high labor costs, an aging fleet and stiff competition from other Gulf carriers.
"It is no secret, His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah wants to turn Kuwait into a regional financial and commercial hub and the role of airlines in achieving this goal is very clear," the minister said.