Potential investors have been formally invited to show initial expressions of interest in the privatisation of Kuwait Airways, with an offer to subscribe to 35% of the share capital.
The privatisation of the Kuwaiti flag-carrier has been a drawn-out affair, complicated by postponements and asset audits, but is set to proceed through the establishment of a new company, KACNew.
All assets, liabilities and rights of the airline will be transferred to KACNew, said the carrier's privatisation committee, and it will have a share capital of KD220 million ($805 million).
A strategic review of the airline has shown that a "holistic transformation" of the flag-carrier provides a "compelling investment opportunity", the committee added.
"[Kuwait Airways'] turnaround potential is underpinned by a business plan that factors in the company's market opportunities and privileges and demonstrates its ability to operate as a profitable standalone airline," it said. The initial invitation is open until 25 August.
The Gulf state's Kuwait Investment Authority will own 20% of the privatised KACNew, ensuring that the carrier will continue to have government backing.
Kuwait has undergone upheaval in its airline industry in the last five years, after the government attempted to create more options in air transport by permitting three additional airlines for the emirate.
The project has had little success. Wataniya Airways collapsed under financial pressures, proposed cargo carrier LoadAir failed to emerge, and low-cost airline Jazeera Airways has scrambled to restructure its operation, cancelling a large outstanding order for Airbus aircraft.
But the reduction in potential competition could prove timely to Kuwait Airways as it seeks investors. The privatisation committee said the carrier held on to a 31% market share last year and the carrier is the only domestic operator with long-haul services.
"Interested parties are now invited to submit their expression of interest," the committee stated, adding that the scheme is open to joint-stock companies listed on the Kuwaiti stock exchange or "specialised international companies". Kuwaiti-domiciled airline operators cannot participate.
"Any sale of the company must realign the airline towards a successful future entity that builds on the aspirations of the Kuwaiti people and the past successes of this national institution," the committee said.