Kuwait Airways Under Decree-Law No. 77: Outside Public Tenders, Outside Competition Law

Decree-Law No. 77 of 2026 was published in Kuwait Al-Youm, Supplement to Issue 1801, dated 29 July 2026, and took effect on publication under Article 11. Its eleven articles make Kuwait Airways Company a Kuwaiti shareholding company wholly owned by the State and repeal Law No. 6 of 2008. The Explanatory Memorandum is candid about why: the 2008 law did not achieve the aspirations held for it, and the company has continued to incur substantial losses.

Why this matters: the headline is ownership, but the operative content is the removal of the carrier from three regimes it has sat inside for years. Read together, Articles 3, 6 and 7 take Kuwait Airways out of the public tendering framework, out of the competition framework, and largely out of Audit Bureau supervision. Anyone who contracts with the airline, bids to it, or competes with it should read those three articles before Article 1.

Ownership settled and locked

Article 1 provides that the company carries on business as a shareholding company under its memorandum and articles of association and Companies Law No. 1 of 2016, that State ownership of the whole share capital remains direct, and that no disposal in any form is permitted without a decision of the Council of Ministers. The Memorandum glosses this as covering sale, pledge and other forms of disposal. The 2008 framework had contemplated a strategic investor and an offering that would leave the State a minority holder; that direction is now formally reversed rather than left dormant.

The sovereign shareholder

Article 2 vests the powers of the ordinary and extraordinary general assembly in the Board of Directors of the Kuwait Investment Authority. Article 3 then provides that the company is managed by a board whose members that general assembly selects, consistent with the Companies Law and without prejudice to Conflict of Interest Law No. 1 of 2023. The Memorandum states the chain plainly: the KIA board, as the company's general assembly, chooses the directors. Counterparties negotiating shareholder-level conditions should identify KIA as the approving body and build timelines around a board cycle.

Out of the State Property System and the Public Tenders Law

The second paragraph of Article 3 is the provision suppliers need to read. Alongside its powers under the articles of association, the board may approve the organisational structure and issue the administrative, financial, staff, tender, auction and procurement regulations, without being bound by Decree-Law No. 105 of 1980 on the State Property System or Public Tenders Law No. 49 of 2016. The Memorandum explains the purpose: to give the company unrestricted powers in conducting its business, and to allow allocation of the land it needs for its activity. Award procedures and the grounds on which an unsuccessful bidder can complain will be governed by company regulations once adopted. Bidders should ask to see them and should not assume the familiar grievance route survives.

The competition exemption is express

Article 6 states that Law No. 72 of 2020 on the Protection of Competition does not apply to the activities of Kuwait Airways. The Memorandum describes this as express wording that admits no interpretation, and explains the drafting choice: because the company is the national carrier and is now wholly State owned, the exemption is confirmed directly, without needing a Council of Ministers decision of the kind Article 4 of the Competition Law provides for. Two consequences follow. Complaints about pricing, capacity or dealings with travel agents and cargo handlers lose their competition-law route and must be framed in contract or under the Civil Aviation Law. And because the exemption is drafted by reference to the company's activities rather than to transactions, a counterparty should still test its own economic concentration filing position rather than assume the carve-out travels with the deal.

Audit, people and the conformity exercise

Article 7 confines the Audit Bureau to studying and commenting on the auditor's reports and the financial statements. That is a deliberate narrowing, and it sits against Law No. 66 of 1998, cited in the preamble, which had removed such exemptions. On people, Article 4 subjects all employees to the staff regulations set by the board, with Private Sector Labour Law No. 6 of 2010 applying to matters those regulations do not address. Article 5 permits direct contracting with international expertise under board rules, but expressly without prejudice to National Labour Support Law No. 19 of 2000, so Kuwaitisation obligations continue to bite. Article 8 answers the question our 20 July note left open: there is no asset transfer mechanism because there is no new legal person. The company's status and its constitutive documents are to be brought into conformity with the decree-law, and no deadline is set. Under Article 9 the competent Minister designated by the Council of Ministers will issue the implementing decisions.

WEFAQ's view: Decree-Law No. 77 finishes a corporatisation left incomplete since 2008, and it pays for commercial flexibility with external oversight while keeping ownership wholly with the State. The trade is coherent, but it moves risk onto those who deal with the carrier: procurement on company terms, no competition regulator to petition, and a single shareholder deciding inside a sovereign institution. We advise clients with exposure to re-paper on that footing rather than assume continuity, and to treat the forthcoming board regulations and ministerial decisions as the documents that will govern the relationship.

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Source: Decree-Law No. 77 of 2026 concerning the conversion of Kuwait Airways Company into a shareholding company wholly owned by the State, and its Explanatory Memorandum, Kuwait Al-Youm, Supplement to Issue 1801, dated 29 July 2026; Companies Law No. 1 of 2016; Decree-Law No. 105 of 1980 on the State Property System; Public Tenders Law No. 49 of 2016; Law No. 72 of 2020 on the Protection of Competition; Law No. 19 of 2000 on National Labour Support; Law No. 6 of 2010 on Labour in the Private Sector; Law No. 1 of 2023 on the Prevention of Conflict of Interest; Law No. 6 of 2008, repealed by Article 10.

This article is provided for general information only and does not constitute legal advice. For advice specific to your circumstances, please contact WEFAQ Law Firm.