KQ chief plays down nationalisation move
Kenya Airways Chief Executive Allan Kilavuka. PHOTO | FILE | NATION MEDIA GROUP
What you need to know:
- The National Aviation Management Bill seeks to give the government full control over the airline by October.
- Currently, the State owns 48.9 per cent of the carrier with the rest shared by non-government entities.
Nationalisation of Kenya Airways (KQ) won’t fix the financial turbulence at the airline, the management has said.
The airline’s chief executive, Allan Kilavuka, told the Nation the move won’t return the national carrier to its past glory.
“KQ is important, and yes, it is possible for it to make a profit, and it can, but the reason for nationalisation is not just for profits. In fact, nationalisation in and by itself, is not going to make it profitable,” Mr Kilavuka said.
He said the airline has a bigger mandate as the national carrier to support the economy, than focusing on just making profits.
REASONABLE RETURN
“KQ is not here just to make profits. There is a bigger mandate. It is a strategic national asset. The airline has a responsibility to make a reasonable return, but more importantly is the role it plays in the bigger economy as a catalyst transporting goods and people from place to place,” he said.
Mr Kilavuka said this as the airline resumed local flights on Wednesday, and at a time when the National Assembly is on the verge of passing a Bill to have the carrier owned by the State by October over constant losses and seeking bailouts.
In the first half of 2020, the airline has already incurred a Sh10 billion loss in terms of revenue and worse days lay ahead as it expects to lose up to Sh50 billion by the close of the year.
Last year, Parliament proposed to have the airline nationalised.
STREAMLINE OPERATIONS
Last month, a Bill to have the airline fully owned by the State through buying out minority shareholders, was tabled before Parliament.
The National Aviation Management Bill seeks to give the government full control over the airline by October. Currently, the State owns 48.9 per cent of the carrier with the rest shared by non-government entities.
“We are ready to complete the transactions once Parliament passes the Bill,” Treasury Secretary Ukur Yatani said after the Bill was tabled.
But KQ says what is needed is streamlining of operations by merging assets and staff to enhance effectiveness if it is to make reasonable returns adding that nationalisation does not target to achieve that.
