Kuwait wants to sell 40 percent of loss-making national airline Kuwait Airways Corp (KAC) to the public and 35 percent to a long-term investor within two years, according to a draft law obtained by Reuters.

"Forty percent will be offered in an initial public offering to Kuwaiti nationals," the bill, which is due to be debated by parliament on Wednesday, said.

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

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

KAC management has been keen to privatise 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 of the Gulf Arab oil producer, according to its Web site.

KAC's IPO would be the latest in the regional aviation sector. Low-cost carrier 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. -Reuters