Kenya Airways takeover law expected to be out by August

Wednesday May 27 2020

A Kenya Airways plane taxis on the runway at the Jomo Kenyatta International Airport terminal. PHOTO | FILE


A legal framework for the nationalisation of Kenya Airways is set for discussion when Parliament resumes next week in what could change stakes for key shareholders that include a consortium of local banks and Royal Dutch Airlines.

The parliamentary Transport Committee has come up with the National Aviation Management Bill 2020, which seeks to guide the implementation of its earlier report that recommended a state takeover of the national carrier.


Under the plan, the government, which owns 48.9 per cent of KQ, is expected to buy out the remaining holders of 51.1 per cent of the shares and form Aviation Holding Company to run the national carrier and Kenya Airports Authority (KAA), which manages airports in the country.

The Cabinet has approved the bill, which is now at the State Law Office for refinement before being brought to Parliament.

Transport Committee chairman David Pkosing said his team would push the bill through all stages by August.


“My committee is focused, and on course to deliver KQ and KAA merger now that the bill to actualise the recommendations in our report is on its way to Parliament after it was approved by the Cabinet,” he said.

“As a committee, we want to deliver the bill by August. We are committed to ensuring the airline receives the necessary support to reclaim its lost glory. This is a critical Jubilee agenda to rescue our aviation in the post-Covid-19 pandemic era.”


Last week, Treasury Secretary Ukur Yatani was reluctant to grant KQ its request for a Sh7 billion emergency bailout tied to the disease, saying the state was keen on a long-term rescue plan.

Mr Pkosing said yesterday his committee’s report alone was not enough to deliver the merger between KQ and KAA, hence the need to introduce the bill in Parliament next week.

Tax exemptions

“Some of the recommendations made by the committee in the report require legal backing, which cannot be achieved through a report. That is why we have come up with a bill to steer the process to the end,” he said.

In their report adopted by the House last year, the committee recommended tax exemptions for the National Aviation Company as a way of saving the dwindling fortunes of the national carrier.

The report had also recommended that the KAA Jomo Kenyatta International Airport and Kenya Airways to be put under Kenya Aviation Holding Group.