KUWAIT, 10 January 2008 — Kuwait’s parliament approved yesterday a privatization bill that will see the government sell 40 percent of national carrier Kuwait Airways to the public and 35 percent to a long-term investor within two years. “Forty percent will be offered in an initial public offering to Kuwaiti nationals,” said the bill, a copy of which was obtained by Reuters earlier yesterday.

“Thirty-five percent will be offered by a government agency in a public auction open to companies listed on the Kuwait stock exchange and specialized foreign firms,” the bill said.

Kuwait would name two advisers to value the carrier, the bill said.

KAC management has been keen to privatize the firm to make it more competitive but many parliamentarians have resisted the move, saying it would put the jobs of Kuwaiti employees at risk.

KAC, which has been posting losses for years, lost most of its fleet — 15 aircraft — during Iraq’s 1990-1991 occupation, according to its website.

KAC’s IPO would be the latest in the regional aviation sector.

Low-cost carriers Sharjah-based Air Arabia sold shares to the public in 2007 and Kuwait’s Jazeera Airways is due to list its shares on Monday. Dubai state-owned Emirates airline, the largest Arab carrier, is also considering selling shares in an IPO.

Meanwhile, Kuwait left the dinar reference rate unchanged for a fourth day yesterday as the dollar slipped on growing expectations the US Federal Reserve will cut interest rates this month.

The dinar will trade around a mid point of 0.27320 per dollar, unchanged from the day earlier, the central bank said.

The dinar, which tracks a currency basket dominated by the dollar, has tended to track the US currency’s moves on global markets.

The dinar has risen 5.83 percent since May 19, a day before the central bank started tracking a basket of currencies.

The central bank said the dollar’s decline on global markets was driving up inflation and making some imports more expensive.