KUWAIT CITY, Jan 9: Kuwaiti MPs approved a law on Wednesday to privatise state-owned Kuwait Airways, allowing foreign investors to buy a stake of up to 35 percent in the new company.

The law, approved by 50 MPs in favour with four against, provides for the transformation of the loss-making national carrier into a private company within the next two years.

A 35pc stake in the new company will be sold at auction to foreign and local investors and 40 per cent will be sold to Kuwaiti citizens in an initial public offering, the law states.

Twenty per cent will be reserved for state-run institutions and the remaining five per cent will be distributed for free to airline employees.

The law requires the government to appoint at least two foreign consultancy firms to evaluate the assets of the airline and its subsidiaries.

Under the law, the new company will be forced to retain national employees of Kuwait Airways for up to five years with the same wages. After that, at least 42 per cent of the company’s staff must be Kuwaiti citizens.

The airline, which has incurred more than $2 billion in losses during the past 17 years, has repeatedly come under fire from parliamentarians who have accused it of squandering public funds.—AFP