Lawmakers propose nationalization of Kenya Airways
The Parliamentary Committee on Transport has recommended the nationalization of Kenya’s national airline to save it from collapse.
The Kenyan Government is the major shareholder in the airline with a 48.9 per cent ownership. The second largest shareholder is 11 Kenyan banks who jointly own 38 per cent of the company, the Royal Dutch Airlines own 7.8 per cent and KQ employees own 2.4 percent of the national air carrier.
The airline’s CEO shared the same sentiments during the company’s investor briefing on 30th April arguing that rival firms such as Ethiopian Airlines, Qatar Airlines, and Emirates are fully owned by their respective governments which allow the companies to operate without high demands from investors.
The members of parliament also suggested the creation of an aviation holding company which will own four subsidiaries including Kenya Airways, JKIA Company incorporated and two other businesses. According to the parliamentarians, JKIA Company will run the main airport as an international hub and provide ground handling services and catering services.
The committee also noted that nationalizing the airline will solve the persistent problem of workers strike. The aviation holding company will harmonize the terms of employment and provide favourable terms to the workers.
If the proposal goes through and KQ gets approval from the regulators and shareholders, the air carrier will be delisted from the Nairobi Securities Exchange.