“JKIA was designed to handle 7.6 million passengers annually but we are currently handling 8.2 million. It will take KAA 50 years to upgrade infrastructure at the airport.”
The PS appeared before the committee alongside Kenya Airways Chief Executive Alan Kilavuka and KAA Acting Managing Director Henry Ogoye to shed light on the status of implementation of the House resolution on the nationalisation of KQ.
Kenya Airways, KAA, JKIA Merger?
Meanwhile, MPs are pushing for the creation of an Aviation Holding Company (AHC) to oversee a major restructuring of Kenya’s aviation sector, a company which would manage key entities, including KQ, the KAA, JKIA and an Aviation Services College.
In a forthcoming report to be presented in the house, the National Assembly Transport, Public Works and Housing Committee concluded that the current Project Implemented Investment Plan (PIIP) is inadequate for revitalising the aviation industry.
The committee is also advocating for the nationalisation of Kenya Airways (KQ) as part of efforts to reposition Nairobi as a leading aviation hub in Africa and to safeguard the nation’s aviation assets, with committee chair David Pkosing, the MP for Pokot South, noting the troubling financial state of KQ, which carries a debt of Ksh75 billion, backed by government guarantees.
“The Committee noted that taking into account KQ’s current financial status and the current lack of competitiveness of Kenya’s aviation industry, the Government and the people of Kenya stand to lose the most in the event the trend is left to continue,” Pkosing stated in the report.
Subsidiaries
The proposed AHC would comprise four subsidiaries: JKIA Company, which would manage the international airport, including ground handling and catering services; KAA, responsible for overseeing all airports and airstrips; KQ, serving as the national flag carrier; and the Aviation Services College, centralising aviation training.
Kenya Airways planes at Jomo Kenyatta International Airport (JKIA) in Nairobi. /FILE
“Under its new mandate, KAA shall maintain at least one serviceable airstrip in each county for purposes of security, health, and other emergencies,” the committee recommended.
To enhance operational efficiency and reduce bureaucracy, the committee emphasised that the nationalisation of KQ should be accompanied by amendments to key laws, including the Public Finance Management Act and the Public Procurement and Asset Disposal Act. These changes would grant the new AHC and its subsidiaries greater financial autonomy and flexibility.
Additionally, the committee recommended tax concessions and exemptions for the AHC, such as zero-rating supplies, customs duty exemptions for aircraft parts, and waivers on excise duties for aviation fuel, incentives which would be geared at improving the financial sustainability of the AHC and KQ, enabling them to compete more effectively within the region.