Parliament on Tuesday voted to nationalise listed airline Kenya Airways to save it from mounting debts in a vote that could set the stage for the buyout of minority shareholders.
The National Assembly unanimously voted to approve the recommendation by the Transport committee for the formation of an umbrella Aviation Holding Company to run Kenya’s aviation sector.
The National Assembly’s Transport committee has recommended that the government establishes the holding company with four subsidiaries comprising the Kenya Airports Authority (KAA), Kenya Airways (KQ), the Jomo Kenyatta International Airport (JKIA) and a centralised Aviation Services College, which will run independently.
“The government has no option other than to move quickly and implement the recommendations as approved by the entire House without amendments,” said Transport committee chair David Pkosing
The committee’s report also recommended the holding company be given tax concessions for a period to be determined and that it be exempted from paying excise duty on all goods, including jet fuel.
The government will now draw up an implementation plan, with clear time lines, said Esther Koimett, the principal secretary at the ministry of transport.
The Treasury remains Kenya Airways’ biggest shareholder with a 48.9 percent stake while strategic partner KLM is third with 7.8 percent on the shareholders’ ranking after the banks who have 38.1 percent.
Nationalisation of Kenya Airways could see the Treasury pay off about 80,000 shareholders who bought the airline’s stock at the NSE.