National carrier Kuwait Airways Corporation (KAC) posted $82.2 million in losses in the fiscal year 2005/2006 that ended on March 31, mainly due to high fuel prices, its chairman said yesterday.Revenues for the state-owned airways reached $868m, up from the previous year's $760m, Shaikh Talal Mubarak Al Sabah told the official Kuna news agency.

Expenditures rose to $950.2m in 2005/2006 from $897m the previous year, due to high fuel prices and increased maintenance costs, he said.

Shaikh Talal said the airline paid about $81m extra for fuel in the past fiscal year, almost equal to its losses.

KAC has spent 15 of the past 16 years in the red and accommulated losses to the tone of $1.8 billion in the 11 fiscal years to 2003/2004.

Losses are covered by the state.

Last year, the government paid $790m to the carrier which represented KAC's losses for seven fiscal years.

The amount had been held back by MPs over allegations of mismanagement.

The amount represented about 66 per cent of the carrier's capital of $1.2bn.

The only year that the airline was in the black over the last 16 years was in 1999/2000 when it made a profit of $80m after receiving compensation from Iraq.

KAC has suffered cash flow problems and a debt burden which peaked at $1.4bn after Iraq's seven-month occupation of Kuwait which began in August 1990.

It borrowed $1.3bn after the emirate's liberation in the 1991 Gulf War, but has repaid most of it.

Besides increase in fuel cost, Shaikh Talal cited "tough competition" as a cause for losses after the government allowed private airlines to operate.

The first airline Al Jazeera, a low-cost passenger carrier, started operations in October while two more airliners, one for cargo and the other a full passenger airliner, are still under establishment.

Kuwait Airways operates a fleet of 15 Airbus and two Boeing 777 aircraft, while total net assets at $2bn last year.

The carrier employs some 7,000 people.