Kuwait Airways posts losses

Kuwait Airways posted a sharp rise in losses for the 2010/2011 fiscal year to March 31 due to an increase in maintenance and fuel costs, its chairman Hamad al-Falah said on Monday. The state-owned carrier incurred losses of 76 million dinars ($275 million, 193 million euros) last year compared to 55 million dinars the previous year, a 38-percent decline, said Falah, cited by the official KUNA news agency. Revenues of the airline last year came at $825 million while spending was $1.1 billion, Falah said. Maintenance cost $130 million, fuel $272 million while extra salaries paid for "surplus" employees was more than $100 million, Falah said. The privatisation-bound airline has posted a loss in all but one of the past 21 years, accumulating losses of more than 2.7 billion dollars. Kuwait has two private airlines, Wataniya Airways, which recently ceased operations due to losses, and the low-cost Jazeera Airways. In March last year, the government formed a committee to probe allegations of widespread corruption in the state-owned carrier and vowed to refer the findings to the public prosecutor. Under a privatisation law, Kuwait Airways will be transformed into a private company with a 35-percent stake to be sold at auction to foreign or local investors and 40 percent to be sold to Kuwaiti citizens in an initial public offering. Twenty percent will be reserved for state-run institutions and the remaining five percent will be distributed for free to the Kuwaiti employees. The privatisation process, however, has been running behind schedule. The airline has a fleet of 15 Airbus and two Boeing aircraft that it bought in the early 1990s.