MPs are demanding an investigation into the woes facing Kenya Airways, citing questionable management and a
lopsided agreement with a partner foreign airline.
The lawmakers protested the ‘skewed’ ownership agreement between the national carrier and Dutch airline, KLM,
as well as the manner in which KQ has been run resulting to its being “technically insolvent.”
Majority Leader Aden Duale yesterday moved a motion to suspend business to discuss the “imminent collapse”
of the national airline.
But the debate veered to sparring between CORD and Jubilee MPs over whichside was to blame for the situation.
"Kenya Airways has been performing dismally in the last four years, reporting a cumulative loss before tax of Sh71.4 billion... This has resulted in the airline being technically insolvent with a negative equity of over Sh36 billion. There are overdue payments of over Sh15 billion to creditors and the short team loan position is currently in excess of Sh140 billion. This operational mess has been presided over by the former and the current management of the airline," said Mr Duale.
Leader of Minority Jakoyo Midiwo (Gem) led calls for the formation of a select committee, which he said will get to the bottom of the mess at KQ.
Claims of ticket overpricing, irregular leasing of aircraft and a poorly negotiated agreement with its partners have been cited as being responsible for the poor state of the airline.
MPs observed that the government owns 29 per cent stake in the airline and has been pumping in billions of shillings, which must be accounted for.
They also criticised the agreement which they said favoured KLM.
"Some decisions have to be made on this matter. According to the MoU between KQ and KLM, the CEO cannot be sacked without the concurrence of KLM. At the same time, the current head of network planning is a KLM employee. This is a conflicted situation and some decisions have been made that suggest that the individual is working for the interests of KLM and not KQ," said Duale.
He called for a renegotiation of the 'skewed' ownership agreement.
The MPs were united in calling for action against current Chief Executive Officer Mbuvi Ngunze and his predecessorn Titus Naikunin for allegedly presiding over the "imminent collapse" of the airline.
"The services offered by Kenya Airways are terrible. Naikuni and Ngunze cannot run away from the issues facing KQ. If decisions were made by Naikuni, he must be held responsible. We need full disclosure and action must be taken," said Chris Wamalwa (Kiminini).
The MPs alleged that a 'cartel' was determined to bring down the carrier.
However, the MPs disagreed over the contents of an audit report that mentioned former Prime Minister Raila Odinga in connection with a company that was awarded a lucrative cargo handling contract.
Duale made reference to the audit, which claimed that Astral Aviation, a company in which the former PM allegedly owns shares, had taken over KQ cargo operations, robbing it of a lucrative source of revenue.
"You cannot talk of corruption in the National Youth Service (NYS) while you are involved in Kenya Airways. This House must rise to the occasion. We must call corruption for what it is," said Duale.
David Gikaria (Nakuru Town East) and Asman Kamama (Tiaty) also accused Raila of doublespeak in the war on corruption.
They asked him to appear to defend himself should the House form a select committee to investigate KQ affairs.
"It is wrong for people to be calling others high priests of corruption while they are bringing down the airline. If Raila is mentioned and summoned, he must come and give his side of the story," said Gikaria.
Raila has denied having any link to the winding up of the Kenya Airways cargo handling business.
He has explained that he only held one share out of 1,000 in "a competitive cargo business at the time when the Kenya Airways business was wound up".
He said that Astral Aviation Ltd had no influence in the KQ management decision to close the business.
Yesterday, Midiwo (Gem) warned against politicising the KQ issue, claiming that the rot at the airline ran deeper.
Midiwo fell short of naming a 'powerful family' which he claimed owned 90 per cent of Kenya Airways planes in partnership with Naikuni.
"Cargo business is not the core business of KQ. That is a side show. We must find the truth. Let us do a select committee so that we can get to the bottom of the matter. We need to know that these Embraer planes from Brazil are owned by known Kenyans," said Midiwo.
He was supported by Opiyo Wandayi, who claimed that "the reason Naikuni and Ngunze had not been arrested was because the real culprits were hiding in the background."
"If we investigate KQ, it will bite more on Jubilee than CORD," claimed Eseli Simiyu.
