Lawmakers Propose Nationalising Loss-Making Kenya Airways

By Dave Simpson
Lawmakers Propose Nationalising Loss-Making Kenya Airways

A Kenyan parliamentary committee has recommended nationalising Kenya Airways as part of an effort to turn around the loss-making airline.

The transport, public works and housing committee also proposed the setting up of an aviation holding company with four subsidiaries, one of which would run Kenya Airways, which is 48.9% owned by the state and 7.8% by Air France-KLM.

Under the proposals, which still need to be debated and voted on by parliament, another arm of the holding company would operate Nairobi's main international airport

The cabinet backed a plan last year to hand over management of Nairobi's profitable Jomo Kenyatta International Airport to Kenya Airways to boost the airline's balance sheet and help it buy new planes. The plan was later shelved.

"The committee recommends...that Kenya Airways be nationalised," the committee's report said, adding the proposals were based on the airline's "current financial status".


Looking To Expand

Kenya Airways, which restructured $2 billion of debt last year, wants to expand its business to boost earnings from catering, fuel distribution, cargo and maintenance. It is planning to open up new routes in a bid to become profitable.

2018 Statistics

The airline reported revenue of 114.45 billion shillings ($1.13 billion) for the year that ended on December 31, 2018, up from 106.17 billion a year earlier, while narrowing its pre-tax loss for the period to 7.59 billion shillings from 9.44 billion.

Further Committee Recommendations

The committee's report also recommended that the aviation 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.

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