by David Ndirangu
Adoption of a parliamentary committee report could see the state takeover ownership of Kenya Airways. This will mean pushing out KLM, a consortium of local banks and other shareholders.
According to the chairman of the Transport Committee Pokot South MP David Pkosing, this is the best move if the government wants to revive the airline.
The government will be required to pay Ksh 11.4 billion to buy out 51.1% worth of shares owned by the other entities. If the recommendations are adopted, KQ will be owned by a new aviation holding group, which will also oversee the Kenya Airports Authority (KAA). This would put the airline in the same position as other regional airlines like the Ethiopian Airlines and EgyptAir.
Minority shareholders of KQ have opposed the nationalization proposal, making their stand known at the airlines 43rd annual general meeting on 10th June. They said that a similar initiative in 1990s was not beneficial. One shareholder stated that the airline was privatized in 1995 because it was collapsing under state watch. KQ chairman Michael Joseph said that he would not support nationalization, but would back it if the government sees that this is the right way to go in the interest of both KQ and the Kenya aviation industry. He however declined to comment on the parliamentary committee proposals, but assured shareholders that their interests will be protected.
The parliamentary report resulted from a two-week public inquiry in June, after attempts by KQ to take over control of JKIA failed. The committee also recommended that the airline should be exempted from paying airport fees and fuel levies.
For these proposals to be adopted, eight pieces of legislation will need to be made.