19 November 2012

Kenya: Minister Calls on State to Rescue Jetlink

IMMIGRATION minister Otieno Kajwang' has petitioned President Kibaki to direct the Treasury to release stimulant funds to rescue the just folded airline Jetlink Express.

Operations at the local low-cost airline have been grounded for lack of cash, which it blames on failure to convert into dollars revenue from its ticket sales in South Sudan.

Managing director Captain Elly Aluvale last week said the airline is unable to access more than Sh170 million ($2 million) banked in Equity and Kenya Commercial banks in Juba.

Subsequently its 350 staff have been sent home pending further communication. The airline heavily depends on foreign exchange to buy fuel, aircraft lease rentals, importation of spare parts and landing fee.

Kajwang' said the cash flow crunch that has hit the company is likely to affect the country's revenue. The minister who was speaking in Kisumu on Saturday pointed out that a swift move by the head of state can save the company.

"Treasury under the directive of the President has offered aid to Kenya Co-operative Creameries, coffee and pyrethrum industries and it will not cost the country much to come to the aid of Jetlink," he said.

He said just like Kenya Airways has received state assistance in the past, Sh 1 billion from the Treasury can save the Jetlink. "The ShI billion can be given as a loan to the company to enable it continue its operations since when one business venture collapses, Kenyans lose several jobs and families suffer," Kajwang' said.

The airline said with foreign exchange shortage in South Sudan, banks are under instruction from the government to give priority to essential services like food, medicine and fuel imports in their foreign exchange allocation.

The currency shortage arises from the stand-off between Sudan and South Sudan over oil export transit fees forcing the South to stop refining its oil in Khartoum.

Equity Bank Kenya has reportedly been advancing them dollar payments based on Jetlink's deposits in Equity South Sudan pending resumption of normal foreign exchange trade in South Sudan.

Jetlink, which has operated for over four years, operates scheduled domestic flights to Kisumu, Mombasa, and Eldoret and regionally to Juba and Mwanza with a strategic intent to spread its wings to Zanzibar and Dar-es-Salaam (Tanzania), Kigali (Rwanda), Asmara (Eritrea) and Khartoum (Sudan). It has a jet fleet of eight aircrafts including seven CRJ aircrafts (50-seater) and one Fokker-28 aircraft (79-seater).

Copyright © 2012 The Star. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.