Decree Issued to Convert Kuwait Airways into a State-Owned Joint-Stock Company

Today, Tuesday, Decree-Law No. 77 of 2026 was issued regarding the conversion of Kuwait Airways Company into a wholly state-owned joint stock company. The decree, which comprises 11 articles, was promulgated in light of developments in the air transport sector and increasing regional competition, and within the framework of keeping pace with legislative and economic developments in line with the state’s recent directives to modernize its legal system and enhance its efficiency.

According to the explanatory memorandum, Article One stipulates the conversion of Kuwait Airways Company’s shares to be wholly owned by the state, with the company conducting its operations as a joint stock company in accordance with its memorandum of association, articles of association, and the provisions of the Companies Law issued by Decree-Law No. 1 of 2016.

Paragraph Two of this article prohibits the disposal of the company’s share ownership, whether by sale, mortgage, or any other means, except with the approval of the Council of Ministers, affirming that the state’s ownership of the company’s entire share capital remains direct.

Article Two stipulates that the Board of Directors of the Public Authority for Investment shall exercise the powers of the Ordinary and Extraordinary General Assembly of Kuwait Airways Company. Article Three provides that the Board of Directors of the Public Authority for Investment, acting as the company’s General Assembly, shall appoint the company’s Board of Directors in accordance with the provisions of the aforementioned Companies Law, without prejudice to the provisions of Law No. 1 of 2023 concerning the prevention of conflicts of interest. Paragraph Two of this article defines the powers of the company’s Board of Directors to approve its organizational structure, issue administrative and financial regulations, adopt regulations governing its employees, and promulgate regulations regarding tenders, auctions, and procurement within the company, without being bound by the provisions of Decree-Law No. 105 of 1980 concerning the State Property System and Law No. 49 of 2016 concerning Public Tenders. This is alongside the powers stipulated in the company’s articles of association, ensuring the company has unrestricted authority to conduct its operations in a manner that guarantees flexibility in carrying out its activities and allocating the necessary land for its operations.

Article Four clarifies that the employment regulations established by the company’s Board of Directors shall apply to all employees of Kuwait Airways Company, subject to the provisions of Law No. 6 of 2010 concerning work in the private sector applying to these employees in matters not explicitly addressed in these regulations.

Article Five stipulates that the Board of Directors of Kuwait Airways Company may directly contract with international expertise and professionals in specialized fields, in accordance with rules established by the Board for this purpose, without prejudice to the provisions of Law No. 19 of 2000 concerning the support and encouragement of national workforce employment in non-governmental entities.

Article Six exempts Kuwait Airways Company’s activities from the provisions of Law No. 72 of 2020 concerning the protection of competition, given that the company is the national carrier of the State of Kuwait and is now wholly owned by it. Consequently, it is natural to confirm its exemption from the provisions of the aforementioned Law No. 72 of 2020 without the need for a Council of Ministers decision to that effect, as mandated by Article Four of that law.

Article Seven explicitly states that the audit by the Court of Accounts over the company is limited solely to reviewing and commenting on the reports of the auditor and the company’s financial statements. Article Eight stipulates that the status of Kuwait Airways Company, its memorandum of association, and its articles of association shall be aligned with the provisions of this Decree-Law.

Article Nine stipulates that the necessary decisions to implement the provisions of this decree-law shall be issued by the competent minister, as designated by the Council of Ministers. Article Ten repealed Article Ten of Law No. (6) of 2008, referenced in the text of the decree. It also repealed any provision that conflicts with the provisions of this decree-law. Furthermore, Article Eleven obligated both the Prime Minister and the ministers to implement the provisions of this decree-law and specified that it shall take effect from the date of its publication in the Official Gazette.