Kuwait Airways in the Black for First Time Since Gulf War
Kuwait Airways Corp. (KAC) posted a profit of 77.2 million dollars in the fiscal year which ended on June 30, going into the black for the first time since the 1991 Gulf War, an official report showed on Sunday.
Revenues for the emirate's national carrier stood at 874.6 million dollars while expenditures reached 797.4 million dollars, according to the government statement obtained by AFP.
The state-owned carrier transferred 15.4 million dollars equally into its mandatory and general reserves, leaving a net profit of 61.8 million dollars for the state treasury.
KAC had projected to break even in the 1999-2000 fiscal year, but it gained 795 million dollars from a case it filed against reinsurance companies.
The case was filed in connection with losses and damage suffered by the airline during the 1990-1991 Iraqi invasion. Only part of the compensation claim was included in last year's budget.
This is the first time that KAC has made a profit after nine years of losses following Iraq's invasion that sparked the Gulf War.
In June 1999, the Kuwaiti cabinet approved a draft law to transform KAC into a shareholding company, but parliament rejected the bill last November. The new profits are certain to revive privatization efforts.
Operational revenues in the 1999-2000 fiscal year, however, remained almost the same as previous years, reaching 521.5 million dollars.
The airline has projected a loss of 30 million dollars for the current nine-month fiscal year that started July 1, following parliament's decision to bring forward the start of the fiscal year to April.
Spending has been estimated at 578 million dollars and income at 548 million dollars.
KAC has suffered from cashflow problems and debts which peaked at 1.4 billion dollars after the seven-month Iraqi occupation, when it lost 86 percent of its capital.
It took a loan of 1.3 billion dollars in 1991 for reconstruction, and has so far repaid 1.035 billion dollars including interest. Half of the original loan is still outstanding.
KAC reported a loss of 242.8 million dollars in the 1998-1999 fiscal year, due to spillover of losses from previous years. The state carrier accumulated a deficit of 755 million dollars from 1991.
The carrier operates a fleet of 15 Airbus and two Boeing 777 aircraft and total net assets stood at 530 million diners (1.72 billion dollars) on June 30, 2000 -- KUWAIT CITY (AFP)
© 2000 Al Bawaba (www.albawaba.com)