Kenya: MPs propose nationalisation of Kenya Airways to revive carrier

The National Assembly’s Transport committee has recommended nationalisation of Kenya Airways as a bold step to overturn the fortunes of the struggling national carrier.

If the report gets the nod of MPs then government will move in and clear huge debts owed by the carrier and take it off private hands making it one of the state corporations.

The debt-ridden Kenya Airways owes CBA group Sh 3.1 billion, NIC bank Sh 2.1 billion, Equitty bank Sh 5.2 billion, National Bank Sh 3.5 billion, Co-operative bank Sh 3.3 billion, KCB Group Sh 2.1 billion and similar amount to DTB bank.

The committee chaired by Pokot South MP David Pkosing at the same time recommended establishment of an Aviation Holding Company with four wholly owned subsidiaries.

In the proposal, Pkosing team wants the creation of KJIA Company incorporated to manage JKIA as an international hub, ground handling and catering services.

The committee also recommended revision of Kenya Airports Authority’s mandate to maintain at least one serviceable airstrip in each county for purposes of security, health and other emergencies.

The arrangement will also see creation of a centralised Aviation Services College and Kenya Airways remaining a national carrier.

Source: www.the-star.co.ke

By: Luke Awich

dre aviation opinion:

Bad move.

We all know that political interference will destroy any value left in KQ.

The best option for KQ is a foreign management contract or merger with an established legacy carrier. Tough decisions need to be made to turn around this once darling carrier in Africa, it can be done, it needs the support of the government and an independent, experienced and professional management team.

The vicious circle of erosion of shareholder value or clawing of tax payer funds has to end.

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