KUWAIT (Reuters) - Kuwait gave on Monday the final nod for the privatisation plans of loss-making Kuwait Airways Corp [KA.UL] (KAC) and to set up a third mobile operator.

Kuwait's parliament in January approved a long-delayed government plan to sell 40 percent of the carrier to the public and 35 percent to a long-term investor within two years.

"The council of ministers approved a draft decree ... to turn Kuwait Airways Corp into a private company," the cabinet said in a statement after its weekly meeting.

Communications Minister Abdulrahman al-Ghunaim told state news agency KUNA the privatisation was expected to be concluded at the end of next year or earlier depending on a planned evaluation of the carrier's assets.

The plan still has to be approved by the Gulf Arab state's emir, who usually signs government-endorsed bills.

Ghunaim also said the cabinet approved plans for a third mobile operator in the Gulf Arab state, of which 50 percent would be sold in an initial public offering to citizens.

Saudi Telecom 7010.SE, which last year won the third mobile licence, will hold a 26 percent stake in the company which is expected to launch operations later this year.

The new company, in which the government will retain a 24 percent stake, will compete with Mobile Telecommunications Co (ZAIN.KW: Quote, Profile, Research) (Zain) and National Mobile Telecommunications Co (NMTC.KW: Quote, Profile, Research) (Wataniya), a unit of Qatar Telecommunications Co (Qtel) QTEL.QA.

(Reporting by Rania El Gamal and Ulf Laessing; editing by Sue Thomas)