After technical measures were taken by Kuwait Airways Corporation (KAC) to reduce its operational hours by 12,000 hours annually and cancel some less commercially viable flights to reduce operational cost and expenses of its 17-plane fleet, some administrative changes are expected to take place.

In this regard, sources at the Investment Public Authority (IPA) stressed that, according to a report generated by a specialized company, KAC was overburdened by the high cost maintaining of employees and fleet. The corporation was overstaffed and continues to operate old, worn out fleet that should have been modernized prior before being privatized.

Sources estimate KAC’s assets to remain less than KD 220 million. They added that according to governmental and parliamentary suggestions, IPA should establish a Kuwait Airways Company within a year with a capital of KD 220 million with the communication minister serving as chairman of the new company’s board of directors. The IPA will buy 40 percent of the new company’s shares and distribute them freely to citizens.

According to the most recent staff and employees statistics, KAC and its subsidiary companies have a total of 7,000 employees, including 2000 citizens. Sources said that 1,080 citizens will retire, 444 wish to be transferred to the government sector while the rest wish to continue working for the new company, there by drastically reducing the number of citizens by 80 percent.

Moreover, sources stressed that KAC’s losses have been accumulating as a result of failure to approve annual balance sheets by the Parliament since 2004, forcing KAC to obtain a KD 80 million loan from a local bank to pay off dues. However, the total debts have risen to KD 180 million in three years, in view of salary increases and the increase in fuel prices by 20 percent.

Sources also stressed that maintenance and engine repair cost have increased as a result of aging planes. “Standard maintenance was done during every 2000-2200 operation hours. However, it has to be done every 1600-2000 hours.” – Al-Qabas