Kuwait Airways' IPO to be completed by year-end; yield weakness in 2009; losses continue in 2010
Kuwait Airways Director of Marketing and Sales, Ahmed Al Hilal, stated the carrier will order aircraft post-privatisation, with the process expected to be completed by the end of 2010 (Emirates Business, 04-May-2010). Kuwait Investment Authority is looking at the size of the IPO. The Kuwaiti Government will retain 20% in the airline and float 80% through the IPO, of which 35% will be offered to Kuwaiti firms, 5% to employees and 40% to the public. Mr Hilal added that the carrier experienced significant yield weakness in 2009, adding that losses will continue into 2010. He also warned that the Middle East aviation sector could face bankruptcies due to intense competition, adding that the private sector airlines cannot compete with the government-run carriers.
Kuwait Airways: "2009 was not a good year as most of the airlines were affected by the crisis on the yields. We are also affected and the yields decreased nearly 30% although we carried more passengers but had lower yields which affected net revenues of Kuwait Airways ... We will carry on with the losses this year. In 2010, we see a little bit of improvement but things will be clearer after October ... Kuwait Airways is moving towards privatisation which is the first step towards making profit. Privatisation will change the way the airlines conducts its business. The airline is looking for a new fleet of aircraft to support the operations.The existing operations are restricted because of the limited number of aircraft. The privatisation will result in more aircraft and improve revenue of the firm.It will also cut costs to the minimum ... We are in the process for an IPO and expect it by the end of the year," Ahmed Al Hilal, Director of Marketing and Sales. Source: Emirates Business, 04-May-2010.