Anthony Mwangi @PeopleDailyKe
Kenya Airways will be nationalised after Parliament adopted a report by a committee yesterday.
The approval of the recommendations by the National Assembly’s Transport Committee paves way for the formation of an Aviation Holding Company (AHC) and tax exemptions as ways of saving the dwindling fortunes of the carrier
Adoption of the report also means the National carrier, or KQ as it is known by its international code, is now free to merge with other three agencies in the aviation sector so as to consolidate balance sheet.
Kenya Airports Authority (KAA), Jomo Kenyatta International Airport (JKIA) and Kenya Airways will be consolidated to one outfit, the Kenya Aviation Holding Group.
Nationalisation of Kenya Airways will require that the Treasury pays off about 80,000 shareholders who bought the airline’s stock at the Nairobi Securities Exchange.
It will also have to pay debtors which include Sh3.1 billion owed to CBA Group, Equity Bank Sh5.2 billion, National Bank, Sh3.5 billion,Co-operative Bank Sh3.3 billion, DTB Bank Sh3.3 billion and KCB Group Sh2.1 billion.
Ethiopian and the Egyptian Airlines,the committee had observed applied the same method which were supported by their respective governments and immediately turned around the airlines to profitability.
“Resources of the Aviation Holding Company and any revenue generated from such resources must be utilised for the mutual benefit and development of all its subsidiaries,” read the report.
The committee considered the submissions made by the stakeholders and noted that the Privately Initiated Investment Proposal (PIIP) does not present a viable option for restoring Nairobi as the civil aviation hub of choice in Africa and treating KQ and JKIA as strategic national assets.