The Kenyan parliament has accepted the recommendations made by the Transport committee to nationalise the country’s main airline, Kenya Airways. The committee mooted folding up the airline and the capital’s airport into an aviation holding company.
The loss-making airline, with 48.9 percent government-owned and 7.8 percent held by Air France-KLM has been accumulating debts. A failed expansion drive and drop in air traffic forced the airline to restructure $2bn of debt in 2017. Nationalisation of the Kenya Airways will mean the Treasury has to pay off about 80,000 shareholders who bought the airline’s stock at the NSE
Kenya Airways Chairman Michael Joseph stated that nationalisation was”necessary to compete on a level playing field. It is not what we want, but what we need,” he added, citing Ethiopian Airlines as an example of a state-run airline that is profitable. Ethiopian model of running air transport assets – from airports to fuelling operations – under a single company, is considered as a succesful model worth emulating. The proposed aviation holding company will have four subsidiaries, comprising the Kenya Airports Authority (KAA), Kenya Airways (KQ), the Jomo Kenyatta International Airport (JKIA) and a centralised Aviation Services College, which will run independently..The other recommendations include holding company to be exempted from paying excise duties on all goods – including jet fuel – and tax concessions for a time period to be determined later.Bobi Wine
