Taxpayers oppose Treasury plans to bail out ailing KQ

Thursday, August 06, 2015 — updated on December 13, 2020 - 2 min read

Kenya Airways chief executive Mbuvi Ngunze (right) and Group finance director Alex Mbugua when they recently announced a Sh25 billion loss. The national carrier transported some 2,000 tonnes of khat to Britain every year before change of rules. PHOTO | DIANA NGILA

National Tax payers Association (NTA) has opposed government’s plan to bailout the loss making Kenya Airways even as it calls for review of the partnership with Dutch airline KLM.

The airline is banking on the Treasury’s helping hand after it announced a Sh25.7 billion loss last week, the biggest ever in Kenya’s corporate history.

The lobby says injection of additional funds to the firm under the current management would amount to waste of public money as the airline’s current woes remain intact.

“The government bailed out Kenya Airways 10 years ago and it is setting a bad precedence for parastatals and other State-owned enterprises by continually offering bail-outs as a result of poor strategic management,” said national coordinator Martin Napisa.

The official called for an overhaul of the current management and asked for investigations to establish the reasons behind the deep losses.

Mr Napisa said the partnership between KQ and KLM should be reviewed or terminated since it is not beneficial to Kenya. The national carrier, he added, should look for other partners who will be able to offer the necessary financial assistance that will return KQ to a profitable path.

The lobby also wants the government to take back the control of KQ by acquiring a majority stake of 51 per cent from the current 20 per cent.