Kenya: Parliament Backs New Bid to Nationalise Kenya Airways

Photo: The Nation
Kenya Airways planes at JKIA in Nairobi. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP

The process of nationalising Kenya Airways is now officially set to start after MPs Tuesday unanimously adopted the report of the Transport Committee.

The passage of the report now means the government will be forced to pay off KQ debtors in a bid to pave way for the nationalisation of the national carrier.

STRUGGLING AIRLINE

The troubled airline owes CBA Group Sh3.1 billion, Equity Bank Sh5.2 billion, National Bank Sh3.5 billion, Co-operative Bank Sh3.3 billion, DTB Bank Sh3.3 billion and KCB Group Sh2.1 billion.

The committee chairman David Pkosing (Pokot South) Tuesday told the Nation that the passage of the report by the House is a big step towards bringing the required changes to the country's aviation sector.

"This is a new dawn to the country's aviation sector and if well implemented, it will open new markets to Kenya Airways and thereby increase their income," Mr Pkosing said.

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At the conclusion of the report, MPs were adamant that the airline's debts should be shared by investors and not paid by taxpayers alone when the nationalisation of the airline starts.

The lawmakers noted that taxpayers cannot be made to pay millions of shillings for the management's mistakes.

The adoption of the report now brings to an end a proposal by KQ on the Privately Initiated Investment Proposal (PIIP) where the carrier had pegged its survival in operating JKIA for 30 years, a proposal that the committee rejected.

The adoption of the report also means that there will have to be rationalisation of staff at KQ with the main aim of retaining existing staff and harmonising the terms of service and remuneration as had been proposed.

In their report, the Transport committee recommended for the nationalisation, formation of an Aviation Holding Company (AHC) and tax exemptions as ways saving the dwindling fortunes of the national carrier.

The report had also recommended that Kenya Airport Authority, Jomo Kenyatta International Aviation and Kenya Airways to be put under Kenya Aviation Holding Group.

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