Kuwait Airways Corp. (KAC) posted a profit of $77.2 million 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 while expenditures reached $797.4 million, according to the government statement obtained by AFP.
The state-owned carrier transferred $15.4 million equally into its mandatory and general reserves, leaving a net profit of $61.8 million for the state treasury. KAC had projected to break even in the 1999-2000 fiscal year, but it gained $795 million 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.
The airline has projected a loss of $30 million 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 and income at $548 million.
KAC has suffered from cash flow problems and debts, which peaked at $1.4 billion after the seven-month Iraqi occupation, when it lost 86 percent of its capital. It took a loan of $1.3 billion in 1991 for reconstruction, and has so far repaid $1.035 billion including interest. Half of the original loan is still outstanding.
KAC reported a loss of $242.8 million in the 1998-1999 fiscal year—due to spillover of losses from previous years. The state carrier accumulated a deficit of $755 million from 1991.
The carrier operates a fleet of 15 Airbus and two Boeing 777 aircraft and total net assets stood at 530 million dinars ($1.72 billion) on June 30, 2000. — (AFP, Kuwait City)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
