Home ECONOMY KQ bosses suffer crushing defeat in bid to takeover JKIA

KQ bosses suffer crushing defeat in bid to takeover JKIA

by biasharadigest

Queried on their spirited efforts to takeover Jomo Kenyatta International Airport (JKIA), outgoing Kenya Airways Managing Director Sebastian Mikosz and Chairman Micheal Joseph have on more than one occasion stated that was the only way to pull out the loss making national airline from the red.

However on Tuesday, the two suffered a blow when the National Assembly Committee on Transport, Public Works and Housing threw out the proposal by the managers and instead recommended that the government establish a holding entity that will jointly manage JKIA, the Kenya Airports Authority (KAA), Kenya Airways and the Aviation Services College.

Committee Chairperson David Pkosing (Pokot South MP) said that nationalising the airline was the only way to rescue the company and protect KQ from fierce competition from regional competitors including Ethiopia Airlines which enjoys massive support from its government.

“We rejected the proposal by KQ because that would mean that with KQ being a private company, the people of Kenya will be giving their money to private individuals who are the shareholders of KQ. That was not going to be tenable,” said Pkosing during an interview with a local TV station on Tuesday.

The committee has also recommended that once the holding company is established, the mandate of the KAA be revised to managing all other airports and airstrips.

Pkosing’s committee also wants the holding company to be granted favourable tax concessions in order to enable Kenya Airways to compete favourably with its competitors.

The takeover has been a hot political potato.

In March, the Kenya Aviation Workers Union (KAWU) mobilised its members to a strike who brought operations at JKIA at a standstill protesting possible job losses.

{Read: Kenya Airways kickstarts process to find Mikosz successor}

MPs also rejected the takeover bid wondering how a loss making entity like Kenya Airways which reported a Ksh7.5 billion loss in the year ended December 2018 could takeover a profit making entity like KAA.

In his submissions to MPs,KAA Managing Director Jonny Andersen also poured cold water on the proposal since as of March 31, 2019 KQ owed KAA more than Ksh5.4 billion in unpaid passenger service charges alongside a flurry of other charges.

Kenya Civil Aviation Authority (KCAA) Director General Dr Gilbert Kibe also told parliament that the loss of revenue by KAA would negatively impact on the development of other airports in Kenya and slow the growth of domestic aviation.

{See also : Michael Joseph gets 3 more years as KQ chair}

During the airline’s Annual General Meeting (AGM) at Pride Centre Nairobi, on June 10, Mr Joseph stated that the airline’s top brass was waiting on parliament to chart the way forward lamenting that the takeover bid had been hugely politicised.

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