MPs accept proposal to nationalise Kenya Airways

In Summary

• Firm is 48.9% government-owned

KQ planes.
KQ planes.
Image: REUTERS

MPs voted on Tuesday to accept a proposal to nationalise Kenya Airways as a way of rescuing it from mounting debts.

The loss-making airline, which is 48.9% government-owned and 7.8% held by Air France-KLM, has been struggling to return to profitability and growth.

A failed expansion drive and a slump in air travel forced it to restructure $2 billion of debt in 2017 to save the business. The carrier later proposed a plan to take over the running of Nairobi’s main airport to boost its revenue.

Parliament’s transport committee however rejected that plan, recommending instead the nationalisation of the airline in a report debated by the national assembly on June 18.

In a voice vote taken in the afternoon session, the majority of lawmakers in the chamber voted to accept the report.

The resolution means the transport committee now has the power to follow up with the company and other relevant state agencies on the implementation of the plan.

The committee’s report proposes that the country set up an aviation holding company with four subsidiaries, one of which would run Kenya Airways.

Under the proposals, another arm of the holding company would operate Nairobi’s main international airport.

The committee’s report also recommended that the holding company be given tax concessions for a period to be determined and that it be exempted from paying excise duty on all goods, including jet fuel.