Published: 24 July 2019
KENYA’S parliament voted yesterday to nationalise the country’s main airline Kenya Airways to save it from mounting debts, The loss-making airline, which is 48.9 percent government-owned and 7.8 percent 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 (R27.78bn) of debt in 2017.
The airline later proposed taking 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 yesterday afternoon, the majority of lawmakers in the chamber voted to accept the report. Kenya Airways chairperson Michael Joseph said the vote was “great news”. :Nationalisation is what is necessary to compete on a level playing field. It is not what we want, but what we need,” he said, referring to competitors such as Ethiopian Airline which are state-run and profitable. Air France-KLM could not immediately be reached for comment. The government will now draw up an implementation plan, with clear time lines, said Ester Koimett, the principal secretary at the ministry of transport. Kenya is seeking to emulate countries like Ethiopia which run air transport assets from airports to fuelling operations under a single company, using funds from the more profitable parts to support others, such as national airlines. | Reuters