FEATURED ARTICLE

Kenya Airways Pulls Out of Plan to Run JKIA

Share
Terminal 1A at the Jomo Kenyatta International Airport in Nairobi.
Terminal 1A at the Jomo Kenyatta International Airport in Nairobi.
Share

National carrier, Kenya Airways, has pulled out of the plan to run the Jomo Kenyatta International Airport following the National Assembly’s move to reject the proposal on July 23.

KQ CEO Sebastian Mikosz, however, says the Privately Initiated Investment Proposal (PIIP) has catalysed discourse about the future of Kenya’s civil aviation.

“KQ’s Board and Management believe that the PIIP has catalysed important discourse about the future of Kenya’s civil aviation, which is now being led by the Government of Kenya. Kenya Airways looks forward to continued collaboration with all involved stakeholders of the process,” said Mikosz in a statement late on Tuesday.

“The Departmental Committee on Transport, Public Works and Housing of the National Assembly collected views from Kenyans and institutions in the aviation sector and submitted a report to parliament on June 17, 2019,” he added.

In rejecting the proposal by KQ, the Committee recommended the establishment of an Aviation Holding Company to consolidate the country’s aviation assets, including the nationalisation of KQ.

Mikosz said the decision to withdraw was agreed on during the quarterly meeting of the Board of Directors held on August 27, 2019. The multi-billion loss making airline had sought a concession to manage the airport to enable it compete with competitors such as Ethiopian Airlines, which are heavily subsidised.

In its proposal, first submitted for formal consideration by Kenya Airports Authority (KAA) and the Public Private Partnerships (PPP) Committee on October 5, 2018, the airline had proposed the creation a special purpose vehicle (SPV) to operate, maintain and develop JKIA.

Why MPs rejected KQ offer on JKIA

But MPs said the airline did not demonstrate that it has the financial capacity, relevant experience and the relevant expertise to manage JKIA as required by section 23 of the Public Private Partnerships Act.

The David Pkosing-led committee also observed that the proposed role of KQ in the concession proposal creates a conflict of interest with regard to its dealings with other airline operators at JKIA and may lead to the oppression of such operators.

The legislators also observed that the implementation of the concession would result in the loss of the regulatory certificate to operate JKIA and the last point of departure clearance Kenya enjoys with regard to its direct flights to the United States, noting that it would take years for Kenya to be audited again and be granted similar approval.

The current regulatory certificates issued with regard to JKIA are not transferable to a third party.

Written by
ERIC ORENGE

The writer is the Content Editor at Business Today. Email: [email protected].

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

PAST ARTICLES AND INSIGHTS

Related Articles
CBK headquarters in Nairobi
BUSINESSNEWSSTOCKS

Central Bank of Kenya Raises KSh 34.4 Bn for Budget Spending in June

Central Bank of Kenya(CBK) received bids worth KSh 34.4 billion from the...

Kenya Power to Deploy 45 EV Charging Stations in Push for Green Mobility
ENERGYTECHNOLOGY

Kenya Power Kicks Off Tariff Transition for Electric Vehicle Customers

Kenya Power, the state-owned electricity distributor, has commenced an exercise to mop...

Family Bank CEo Nancy Njau
BUSINESSFEATURED ARTICLENEWS

Family Bank Strengthens Credentials Ahead of Listing

Family Bank, considered the 4th largest in Kenya in terms of geographical...

Dr Martin Oduor Otieno
BUSINESSINSURANCENEWS

SanlamAllianz Holdings Kenya Appoints Dr Martin Oduor Otieno as New Board Chairman

SanlamAllianz Holdings Kenya has appointed Dr Martin-Oduor Otieno as its new board...