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KQ's airport take over bid would have cost Kenya US route - report

In Summary

• It would take Kenya years to be re-audited for a similar approval as the current regulatory certificates issued with regard to JKIA are not transferable to a third party.

• Kenya’s lobby to have direct flights between Nairobi and the US dates back more than four years ago.

Airplanes taxi at JKIA
NATION'S PROPERTY: Airplanes taxi at JKIA
Image: FILE

Jomo Kenyatta International Airport could have lost the Category 1 status allowing direct flights to and from the US, if Kenya Airways had been cleared to run it, according to inquiry findings by MPs.

The inquiry into the proposed Kenya Airways’ Privately Initiated Investment proposal to Kenya Airports Authority shows implementation of the PIIP would result in loss of the regulatory certificate to operate JKIA.

“This would consequently result in loss of the Federal Aviation Administration (FAA) International Aviation Safety Assessment (IASA) Category I status the airport currently enjoys with regard to its direct flights to USA,” the report stated.

Subsequently,  it would take Kenya years to be re-audited for a similar approval as the current regulatory certificates issued to JKIA are not transferable.

Kenya’s lobby to have direct flights between Nairobi and the US dates back more than four years ago.

The bid eventually became a reality last October when the inaugural Nairobi-US flight was launched October 28 following countless inspections and audits by the FAA.

The committee on transport, public works and housing established Kenya would also need to renegotiate MoUs and Letters of Procedures signed with neighbouring states and agencies should the PIIP have gone through.

Business at JKIA has been slowing down over the years in the region with market share dropping to 34 per cent in 2017 from 50 per cent in 2013, while Ethiopia’s Bole International Airport grew its market share to 44 per cent from 30 per cent over the same period.

Bole International Airport has a capacity of 22 million passengers annually while JKIA has a maximum capacity of 7.4 million passengers.

With regard to the number of aircraft, Ethiopian Airlines has approximately 100 aircraft and 59 on order while KQ has 40 aircraft and currently no aircraft on order.

 

“In the event the current decline of Kenya’s competitiveness in the aviation sector continues, Nairobi could be replaced by Addis Ababa as an aviation hub leading to loss of revenue and employment and the potential collapse of KQ,” the report stated.

A collapse of the national carrier could ultimately expose Kenyan taxpayers to the government guarantees of Sh75 billion issued to KQ’s creditors.

The committee also raised concerns that although KQ had committed to retaining all current JKIA staff to the Special Purpose Vehicle on terms equal to those offered at KAA for a 12-month period, the airline did not address the issue of job security after.

Speaking during the airline's Annual General Meeting last week, KQ chairman Michael Joseph said although the management strategy presented to the Kenya Airport Authority (KAA) was feasible, the airline had pulled out of plans to manage the airport due to massive political interference.

''We gave up on the plans to manage JKIA after the whole issue was politicised," Joseph said.