A draft law for the privatisation of Kuwait Airways has been approved by its state owners backed by improving finances at the carrier.

The Government draft still has to undergo a parliamentary debate in the Kuwaiti National Assembly, but airline chairman Ahmed al Meshari believes the airline could now be among the first Middle Eastern and North African airlines to privatise. Despite pledges of action, most of the region's carriers still remain in state hands.

The Kuwaiti airline has been struggling to return to profit after being heavily disrupted by the Gulf War, but the latest budget presented to the National Assembly envisages the carrierbreaking even in 1998/9. The previous forecast had been for a $14.2 million loss on sales of $720 million.

The news follows a series of improved results from the Gulf airlines. The Emirates group in Dubai posted record profits which almost doubled during 1997/8, and Gulf Air has emerged from near-bankruptcy two years ago.

Gulf Air's newly published 1997 accounts confirm its early announcement of a return to net profits of BD17 million ($45 million), representing its best performance for five years. The improvement follows heavy cost-cutting which saw a further 14% cut in seat capacity as eight aircraft left the fleet, consolidation around 49 destinations - down from 60 two years ago - and the loss of nearly 600 jobs from the 6,000-strong workforce. Despite the cutbacks, passenger numbers fell by only 3% and yields showed their first rise since the Gulf War.

Royal Jordanian more than trebled its operating profits to $12 million last year after trimming back loss-making routes to Canada and Singapore and withdrawing three freighters from service.

Source: Flight International