State-owned Kuwait Airways incurred a 55 million dinar ($189 million) loss last year due to stiff competition and high fuel prices, its chairman said in comments published on Thursday. Al-Qabas newspaper quoted Hamad Al-Falah as saying that $65 million were lost due to stiff competition in the local market and $20 million due to higher fuel prices. The privatization-bound airline has posted a loss in all but one of the past 20 years, accumulating losses of more than 2.5 billion dollars. Kuwait has two private airlines, Wataniya Airways and the low-cost Jazeera Airways. In March, the government formed a committee to probe allegations of widespread corruption in the state-owned carrier and vowed to refer the findings to the public prosecutor. Under a privatization law, KAC will be transformed into a private company with a 35-percent stake to be sold at auction to foreign or local investors and 40 percent to be sold to Kuwaiti citizens in an initial public offering. Twenty percent will be reserved for state-run institutions and the remaining five percent will be distributed for free to the Kuwaiti employees. The airline has a fleet of 15 Airbus and two Boeing aircraft which it bought in the early 1990s. Meanwhile, year-on-year inflation in Kuwait fell to 2.8 percent in January from 6.8 percent a year earlier, but it was up on December's rate of 2.1 percent, official figures showed Wednesday. The consumer price index (CPI) 2010 rose to 138.8 points from 135.0, with most of the hike caused by rises in food and beverages prices, according to figures posted on the central bank's website.
