The Kenya Airports Authority (KAA) says it has received an application from Kenya Airways #ticker:KQ to manage operations at the Jomo Kenyatta International Airport (JKIA), in a restructuring plan aimed at aiding the airline’s recovery and boosting its revenues.
KAA managing director Jonny Andersen said Friday that the application, which outlines how KQ will support and grow the aviation business in Kenya, will be granted if its meets approval from the airports regulator.
“In addition, KAA must satisfy itself that the proposal is feasible and provides for value for money to both KAA and the public before implementation,” said Mr Andersen in a statement.
To be able to ascertain the viability of the project, KAA has appointed an adviser to assist and guide comprehensive due diligence and an evaluation process for the project.
The process, according to Mr Andersen, is structured in line with requirements of the Public Private Partnership Act.
Kenya Airways is set to merge with KAA as part of a grand plan to deepen the airline’s recovery and cement Nairobi’s status as a regional transport hub.
According to a policy paper seen by the Business Daily which got the cabinet’s approval in June, the aim is to reposition KQ in a similar fashion as its main rivals, including Ethiopian Airlines, which have relied on government backing to expand their reach.
The move, dubbed 'Project Simba', also appears to be a reaction to the financial difficulties the carrier has continued to experience even after last year’s completion of a major reengineering drive, causing concern that it may not be able to withstand competition in the near future.
Through a public-private partnership (PPP) which is yet to be signed, Kenya Airways will take over all the staff and operations of the KAA.
The move will at once expand the range of the airline's services to include ground handling, maintenance, catering, warehousing and cargo.
It is also envisaged that a special economic zone will emerge around the country’s main aviation hub, JKIA.
The government is further expected to support the joint venture by exempting the national carrier from certain taxes and allowing it to retain several levies as part of the plan to stop financial haemorrhage at KQ and bolster JKIA’s status as East Africa's aviation hub.