Kenya Airways budget carrier Jambojet is yet to take to the skies even after getting the greenlight from the authorities. PHOTO | FILE. The government shall acquire 100 per cent of Kenya Airways, its assets, liabilities, rights, legal cases, licenses, and employees.
That will, however, not guarantee immediate profitability because with the current flight shutdown, this will be a year of record losses for airlines across the world
Much as the 2008 global financial crisis put an end to flights of the supersonic Concorde, this pandemic is likely to remove two planes from the skies, that are favourites of passengers across the world
Michael Joseph said that when the airline resumes flying in Kenya, it will be in a slimmed-down schedule, with fewer destinations and flights.
The next chapter of the Kenya Airways (KQ) journey now seems to be set. In his comments to shareholders during the company’s 44th Annual General Meeting last Friday, that was held virtually, Chairman Michael Joseph mentioned that the National Aviation Management bill had been introduced in Kenya’s Parliament.
The bill arose out of an investment proposal by KQ in which it had sought to take over management of its main base, the Jomo Kenyatta International Airport, from the Kenya Airports Authority. This raised a hue and cry when Parliament reviewed the proposal during a public participation phase, and when its Transportation Committee completed a report in June 2019, it instead recommended re-nationalising the airline that was privatised through an IPO in 1996.
The bill creates a Kenya Aviation Corporation that will promote the development of the aviation sector and advise the government. It will have subsidiaries including an Aviation Investment Corporation, an Aviation Corporation Fund, National Aviation Council, a new Kenya Airports Authority, and a new Kenya Airways, that replaces Kenya Airways PLC which is listed on the Nairobi Securities Exchange.
The government shall acquire 100 per cent of Kenya Airways, its assets, liabilities, rights, legal cases, licenses, and employees. It is expected that minority shareholders, who were already diluted in a restructuring in 2017 will be bought out for a sum of about Sh800 million, while local commercial banks who became shareholders in the restructuring will be issued with Treasury bonds. The airline’s balance sheet will be combined with that of the Kenya Airports Authority.
This will put an end to quarterly disclosures, short-term targets, and the pressure to pay dividends to investors that had become […]
