Members of Parliament on Tuesday voted to adopt a report seeking to nationalise national carrier Kenya Airways, to save it from cash crunch.
The carrier which is currently 48.9 percent government-owned and 7.8 percent held by Air France-KLM has been making loses year-on-year, and efforts to rescue it from the turbulence have been futile.
The airline is reeling on a Ksh200 billion debt, even as the leadership faces management crisis that has seen the current CEO Sebastian Mikosz announce his exit in December.
“Nationalisation is what is necessary to compete on a level playing field. It is not what we want, but what we need,” said KQ Chairman Michael Joseph who spoke to Reuters.
Read: How Gulf Energy Colluded With Cartels To Fleece KQ With Outrageous Fuel Prices
The government through Principal Secretary for Transport Esther Koimet said that it had no option but draw implementation plan and timelines for nationalisation of KQ.
“Parliament is our boss … we will obviously take the recommendations of parliament. The government is keen to take a consolidated view of aviation assets of the country in order to make sure they work in a coherent and efficient way to support the (Nairobi aviation) hub,” Koimett said.,” she told Reuters.
If the report is implemented, the government will have to set up an aviation holding company with four subsidiaries, one of which would run Kenya Airways. Another arm of the holding company would operate Nairobi’s main international airport.
The holding company will be given tax concessions for a period to be determined and be exempted from paying excise duty on all goods, including jet fuel.
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