National carrier Kenya Airways has denied allegations made by Deputy President Rigathi Gachagua that they are under state capture.
KQ Chairman, Michael Joseph, has dismissed the allegations as erroneous saying the airline is operating under the set procedures.
In an interview with Citizen TV, Gachagua stated that the reason behind KQ's losses is bad contracts that they had entered into to benefit a few individuals he claimed were part of state capture.
"We have had very serious discussions with Kenya Airways. Their planes are always full, and they have the highest fares in the continents yet they make losses because of state capture. Because the people who lease the air crafts overcharge Kenya airways because of state capture," he said.
"We are dealing with that so that we can bring the operational cost of KQ so that we can begin making profits."
KQ Chairman refuted the claims noting that the contracts by the airline are purely commercial business agreements whose aim is to benefit the airline.
He also explained that the National carrier had entered into lease agreements with renowned international companies that manage hundreds of aircraft leases to different international airlines globally.
Joseph also dismissed claims that they were overcharged for key services offered to the airline.
"The costs are within the prevailing market rates at the time of negotiating the transactions."
He also said that KQ Board and Management have been engaging with the lessors to reduce the overall costs of leasing aircraft.
Joseph added their restructuring plan for the airline is on course and expects the company to return to profitability in the next two years.
Outlining its plane leasing scheme, the airline known internationally as KQ, said it is executing a number of cost-cutting measures and revenue growth strategies under project 'Kifaru'.
