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State should tread carefully on planned Kenya Airways revival

By The Standard | May 19th 2019

The current effort to give a fresh breath of life to national carrier Kenya Airways that is heavily laden by debt is welcome. The move is laudable, but only if it will solve, once and for all, the airline’s perennial problems.

The recent proposal for the nationalisation of Kenya Airways by the airline’s management, and now by a parliamentary committee, could open a new phase for the company. Notably, this is among the eight options that had been explored by the stakeholders.

National Assembly Transport Committee chaired by Pokot South MP David Pkosing seems to have settled on a nationalisation process and the creation of five subsidiaries within a holding company to run the airline, JKIA and provide related services in the recommendation modelled on the aviation management structures in countries such as Ethiopia and Egypt.

On paper, it carries the possibility of success, but KQ is saddled by baggage stretching back to more than a decade, including mismanagement that has seen the airline become a pale shadow of its once proud tagline, The Pride of Africa. The national carrier, even after selling a stake to Royal Dutch Airlines KLM, is barely afloat. Other attempts have been made before, several have failed.

It therefore behoves the government, if it adopts the committee’s report, to ensure that this time, the proposed solutions will be implemented, and work.

But we urge caution on this path. If the nationalisation process is adopted, the government will have to buy off the other shareholders for possibly hundreds of billions of shillings. Where will the money come from? Will this be another hole where taxpayers’ cash will be sunk? This will be the questions in Kenyans' minds. It is also worth noting that most of the shareholders were coerced into the current ownership structure through a capital restructuring barely three years ago.

Kenya Airways is a national asset that must be protected. But Parliament, government and all the stakeholders must ensure that every caution is taken so that only public interest is served by the proposal to nationalise the airline.

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