EDITORIAL: Get KQ nationalisation effort back on course

EDITORIAL: Get KQ nationalisation effort back on course

A legal hitch has forced Parliament to stop debate on the National Aviation Management Bill, 2020, which provides guidelines for the nationalisation of Kenya Airways.

The proposed law, it has been argued, lacks the input of Kenyans and other stakeholders, in line with Article 118 of the Constitution.

This anomaly should be corrected speedily to get the efforts to salvage the loss-making airline back on course.

Privatised 24 years ago, KQ has been facing turbulent times as State-run Ethiopian Airlines shines in the region.

Over the years, Ethiopian Airlines has successfully managed to increase its routes, run airports and fuelling operations, all under a single company, and using money from the more profitable parts to support the less lucrative ones.

This is the same model that KQ will use after the nationalisation process is complete, a scheme that will enable it to cut reliance on the flying business because it will become part of an aviation college and the Jomo Kenyatta International Airport (JKIA).

JKIA alone is projected to earn annual profits amounting to billions of shillings. Also, it has thousands of acres of land that would boost the new holding company’s balance sheet. Nationalisation will also exempt KQ from taxes on engines and fuel.

Other state-run airlines such as Emirates have thrived under the same model, allowing them to invest in efficient fleets and diversify into airport services, engineering, catering, and tour operations.

Emirates has seven subsidiaries and its parent company has more than 50.

Growing competition, sluggish demand, structural and institutional deficiencies, and geopolitical turmoil are partly to blame for the collapse of African national carriers such as Ghana International Airways and Air Nigeria.

However, KQ is in a good position to reclaim its glory if the government can save it from the mounting debts. KQ already knows how to compete in a crowded market.Before Covid-19 affected international travel, demand for KQ services was growing as it sought to gain a big share of Africa’s untapped market.

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.

Leave a Reply

*