LONDON — By all normal measures, Kuwait’s national carrier should be successful. The tiny, oil-rich emirate at the head of the Persian Gulf has one of the highest per capita incomes in the world. Its economy is booming. An affluent middle class and a large expatriate population combine to provide a pool of customers.
Instead, the airline has been left far behind by its younger Gulf competitors. Its fleet is elderly – remarkably, it still operates Airbus A300s and A310s – with an average service age nearing two decades, leading to heavy maintenance costs. Its poor in-flight service standards are frequently criticized by passengers, and are all the more noticeable in comparison with the high standards set by other carriers in the region. It is also perennially loss-making.Additionally, it is generally agreed to be heavily over-staffed, a consequence of what in some ways is a curiously socialistic society. No less than 93% of the working population is employed, directly or indirectly, by the state.
The airline has also had the misfortune to have been something of a political football. Unlike most Gulf nations, Kuwait has an active national legislature, and one that has not hesitated to meddle in the national carrier’s affairs.
Kuwait Airways’ stagnation has led to rival carriers stealing its lunch. Other Gulf airlines siphon off much of the emirate’s long-haul traffic to their own hubs, while local hybrid carrier Jazeera Airways has successfully mopped up a sizeable percentage of Kuwait-originating regional traffic.
Since 2008, Kuwait Airways has been attempting to jump-start Kuwait Airways’ fortunes by privatizing the state-owned carrier. But, like a desert mirage, the prospect of life in the private sector has faded away each time the airline has seemed to be making some progress towards it.
The process has faltered at least twice, with the original timetable of achieving privatization by 2010 going by the wayside and the airline in 2011 offering incentives to prospective investors that were said to include discounts on fuel and exclusive rights to fly government passengers. Nor has the prospect of life in the harsher commercial world appealed to members of Kuwait Airways’ workforce. To reduce the airline’s headcount, the government has had to offer to transfer personnel to other state positions of equivalent seniority, or pay them off with a financial package equivalent to three years’ salary.
Finally, in January 2013, the Kuwaiti parliament passed what seemed to be a binding privatization agreement by which the government would retain only a 20% stake, with the rest being offered to a mix of investors and employees. In June this year, Jazeera Airways formally bid for 35% of the national carrier, the largest amount a single private investor can take under the privatization law.
Within days, however, reports began to circulate that the Kuwaiti government, for unknown reasons, had decided to retain 75% of the national flag carrier’s equity. Reported comments by the airline’s chairwoman, Rasha Al-Roumi, seemed to confirm that the privatization was effectively dead.
In a statement to Airways, Kuwait Airways would say only that “the future plans of Kuwait Airways are being negotiated between the Parliament and Government to change the law. We still do not have any accurate information about the law and its developments as it is a government issue.”
At least the airline’s fleet problem is finally being addressed. In February last year it ordered 15 Airbus A320neos plus 10 A350-900s. Remarkably, these were the first new aircraft to be ordered for almost two decades. To help hold the line until these are delivered later this decade, it has also leased five A330-200s and seven A320ceo. These have started to arrive. The Airbus order was followed up in December 2014 with an order for 10 Boeing 777-300ERs, which should start to arrive from November 2016.
So, the equipment is on its way. Just what type of airline will be operating it remains to be seen.