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Corporate

No bailout for KQ until executives exit, Duale says

Leader of Majority Aden Duale. PHOTO | FILE
Leader of Majority Aden Duale. PHOTO | FILE  Nation Media Group

Parliament will not approve any bailout to troubled national carrier Kenya Airways (KQ) until chief executive officer Mbuvi Ngunze is sacked and Chairman Denis Awori is removed from the board.

This is according to National Assembly Leader of Majority Aden Duale, who says once Mr Ngunze and Mr Awori exit, the House will compel Transport secretary James Macharia to commence renegotiation of the joint venture between Kenya Airways and Dutch carrier KLM.

“We will not allow any government bailout of Kenya Airways until Mr Ngunze and Mr Awori are removed from KQ. This is the bare minimum requirement from the National Assembly,” said Mr Duale Friday on the sidelines of a Speakers round-table with the Kenya Private Sector Alliance (Kepsa) in Mombasa.

Mr Duale accused the private sector of involvement in corruption, saying some of the problems facing the national carrier stem from underhanded business dealings with private firms.

KQ reported a record net loss of Sh26.2 billion for the year ended March, widening a Sh25.7 billion net loss the year before.

The airline says it has cut its half-year loss by Sh7 billion to Sh5 billion in the six months to September.

Renegotiate KLM deal

The government Majority Leader said the KQ-KLM venture is partly to blame for the troubles facing the national carrier which has been dogged by flights cancellations.

The airline is also facing a strike by its pilots, who have threatened to down tools from Monday.

“That joint venture must be renegotiated because that is the genesis of KQ’s problems,” said Mr Duale.

He said that despite the government bailing out the carrier, the loan has not been reflected in the books of accounts of the government of Kenya.

“KQ is a listed company with KLM being the majority shareholder. Despite the billions of shillings taxpayers have sunk in KQ, the government shareholdings still remains unchanged at 28 per cent. This is why we are unable as the government of Kenya to sack the chief executive officer Mr Ngunze and chairman Mr Awori,” he said.

Addressing the conference, Mr Duale challenged Kepsa for keeping quiet when the national carrier was sinking.

“Why are you as the private sector keeping quiet when KQ is going down? I paid Sh53,000 for a trip from Nairobi to Mombasa that would have paid for an air ticket to one of my constituents traveling to Bombay, India, for treatment,” he said.

Mr Duale was among hundreds of passengers who were stranded in Nairobi and Mombasa two weeks ago due to cancellation of flights by KQ.

“It is strange that only politicians have spoken out on the problems facing Kenya Airways. The voice of the private sector is absent. The private sector must come out and speak on the problems facing the airline,” Mr Duale said.

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