TURBULENCE

Private interest claims rock KQ nationalisation plan

LSK, aviators say National Aviation Management Bill, 2020 not sure cure for airline troubles

In Summary

•Concerns are that KQ is a loss-making entity hence no commercial sense in amalgamation.

Lawyers oppose bill seeking to have KQ nationalised.
Lawyers oppose bill seeking to have KQ nationalised.
Image: FILE

Lawyers want plans to nationalise Kenya Airways put on hold and the the bill outlining this withdrawn in its entirety.

Together with aviation experts, they say being a private entity, MPs  have no mandate to solve KQ problems.

Raising concerns of vested interests behind the proposal, the lawyers said the bill if enacted poses more problems than solutions for the airline.

 
 

LSK boss Nelson Havi told  the National Assembly Transport committee not to undertake a "perilous task' to solve a problem that’s not theirs.

The National Aviation Management Bill, 2020, is currently being subjected to a second round of public participation.

It proposes that Kenya Airways, Kenya Airports Authority, and Aviation Investment Corporation – to be created, be under a holding company - Kenya Aviation Corporation.

It also establishes a National Aviation Council to be chaired by the President an arrangement which LSK expressed discomfort with.

Havi said it makes no commercial sense to commercial to merge the loss-making Kenya Airways with a profitable KAA.

“What is the public good that MPs seek to protect by insisting on spending public funds to revive KQ without interrogating why the airline is where it is?” Havi asked.

Citing managerial missteps as the reason for KQ woes, he told the committee chaired by Pokot South MP David Pkosing “to let the person who caused the problem solve it.”

 
 

Pkosing rejected assertions of vested interests on the bill saying Parliament received the legislation procedurally.

“The insinuation it was brought by some individuals is wrong and should be expunged from the committee records,” the MP said.

Several law firms have petitioned Parliament against the legislation saying it was premature and not well thought out.

Core to their concerns are proposals to exempt the aviation holding company from certain provisions of Public Procurement and Asset Disposal Act; State Corporation Act; and the Companies Act.

Kenya Association of Air Operators; Kenya Airline Pilots Association; KAWU; travel agents; meat exporters; and Fred Opot - aviation consultant, also sought a further relook into the bill.

Their take was that the nationalisation was not informed by a feasibility study and that there is no guarantee it would turn around KQ fortunes.

To them, the proposed structure is bureaucratic and one that portends difficulties in decision making and flow of information.

Aviation experts want to lead the proposed entities as managing directors – with a bachelor’s degree as a minimum requirement.

Kalpa said the absence of pilots in the KQ board is the reason for the missteps that have played out in the airlines’ operational and purchase decisions.

“Just as the leader of a plane is a pilot, the chairperson should be a pilot,” the Kalpa vice chairman Timothy Njoroge said.

They want KAA to manage all airports apart from JKIA which they say should be a limited liability company as a step to shore up KQ revenue streams.

Pkosing told the experts that his committee would balance the proposals to ensure that everyone is a winner.