Saturday, November 10, 2012

Kuwait Airways On The Right Track

Last week a decree was issued creating Kuwait Airways Company a shareholding company that will take over Kuwait Airways Corporation. The company is tasked with privatizing the airline after restructuring it.
The board has a three year term and will be chaired by the Minister of Communication who will also name the board members.

The Ministry of Finance is tasked to covering the losses incurred by Kuwait Airways Corporation and to provide end of service benefits to any employee who wishes to leave the company.

The decree goes a long way towards addressing issues that delayed earlier privatization efforts.

This is similar to the Royal Jordanian privatization methodology except Royal Jordanian had a financial dimension to resolve; that was addressed by the sale of non core functions. Kuwait Airways has a staff issue.
The Workers Union has been accusing management of not safeguarding workers right. These are issues that can be resolved. Gulf Air came to an agreement with its labor union over employee layoffs.

This is not an easy task, Royal Jordanian's privatization took almost two decades to happen for several reasons mainly geopolitical and financial.

It is a step in the right direction and shows a government resolve to tackle the issue in a structured and realistic manner.

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