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KQ owes aviation sector regulator Sh262 million

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A fleet of Kenya Airways planes at Jomo Kenyatta International Airport in this photo taken on July 15, 2020. PHOTO | JEFF ANGOTE | NMG

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Summary

  • The amount is part of the total of Sh548.4 million owed to the Kenya Civil Aviation Authority (KCAA) by various parties.
  • The amounts claimed by the agency have been disclosed by Auditor General Nancy Gathungu in a review of its books for the year to June 2021.
  • Ms Gathungu did not disclose what constituted the debt owed to KCAA by the national carrier.

Kenya Airways #ticker:KQ owes the aviation authority Sh262.9 million, a new audit tabled in Parliament shows.

The amount is part of the total of Sh548.4 million owed to the Kenya Civil Aviation Authority (KCAA) by various parties.

The amounts claimed by the agency have been disclosed by Auditor General Nancy Gathungu in a review of its books for the year to June 2021.

Ms Gathungu did not disclose what constituted the debt owed to KCAA by the national carrier.

The aviation sector regulator, however, charges airlines and their staff including cabin crew many types of fees. They include inspection and certification fees and charges for aircraft landing and take-off.

The services offered by KCAA are critical in ensuring safety and efficiency in the airline transport industry.

The agency, for instance, conducts a security audit on airlines for which it charges a fee. Airlines also undergo continuous inspections.

The debt is a signal that KQ, as the airline is known by its international code, has been allowed to continue operating without paying the regulatory fees.

The government is the major shareholder in the national carrier which it has been supporting with a series of bailouts after the company sunk into multi-year losses.

The National Treasury has allocated KQ Sh20 billion in the latest supplementary budget estimates presented to Parliament on February 2.

The company needs money for the maintenance of grounded planes, payment of salaries, and settlement of utility bills such as security, water, electricity, and parking as well ease the effects of the virus that has obliterated global demand for travel.

Without State aid, the airline risked running out of money in the near future against the background of unease among banks about lending to African carriers.

The bailout comes as the State dropped the favoured long-term solution for the ailing Kenya Airways that was anchored in nationalisation of the airline.

The nationalisation plan approved by lawmakers in July 2019 would have led to the delisting of the airline from the Nairobi Securities Exchange (NSE) #ticker:NSE .

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