Chirchir believed that the airline requires significant support from the government
Transport Cabinet Secretary nominee Davis Chirchir on Friday, August 2 made a bold call for the government to increase its stake in Kenya Airways, the country’s national carrier that has been hit by a series of losses.
While appearing before the National Assembly’s Committee on Appointments, Chirchir believed that the airline requires significant support from the government, noting that the 49 per cent shares it wields in the airline may not be enough to turn around its fortunes.
“At present, the government holds approximately 49% of the airline’s shares. If this stake were to increase to 80% and we were to introduce a strategic partner, it could greatly assist in resolving the current challenges facing the airline,” he revealed.
“This approach would potentially salvage the situation and put Kenya Airways on a path to recovery.”
Energy Cabinet Secretary Davis Chirchir during a past address. /FILE
Under the leadership of National Assembly Speaker Moses Wetang’ula, the vetting committee expressed concern over former Transport CS Kipchumba Murkomen’s (current Sports CS nominee) failure to fulfil previous promises to resuscitate the national carrier.
The nominee predicted that Kenya Airways would run a system that needs support, adding that if appointed, he would sit down with the staff to identify the existing internal gaps first.
“The industrial relations have really been a major pain in KQ. We need to have ownership of the entire management and staff, to understand the challenge. Kenya Airways, from an aviation perspective, is a very strategic asset,” he continued.
Chirchir agreed that the government’s decision to pump Ksh600 billion into the carrier to prevent it from collapsing was commendable but not sustainable.
“We need to look at what they’re doing right and build on it. We also need to bring in a partner to build a network of supporting airlines to get Kenya Airways out of where it is,” said Chirchir.
Not satisfied by Chirchir’s response, Majority Leader and Kikuyu MP Kimani Ichung’wa probed Chirchir further, asking whether his promises are empty and similar to those of cabinet secretaries who have failed to stir change in the strategic docket.
Chirchir’s promise might counter that by KQ’s management regarding the future of the government’s shareholding. Kenya Airways Chief Executive Officer (CEO) Allan Kilavuka, during an interview with Citizen TV on Friday, April 12, revealed that numerous investors expressed interest in the airline, which was revealed to be expressing optimism in sealing a deal with the investor before the end of the year.
The deal would however see the national government lose its majority stake of 48 per cent should the new investor buy out all the shares offered by the airline in the recapitalisation deal aimed at returning the renowned airline to profitability.
The national government is the majority shareholder with a 48.90 per cent stake, followed by KQ Lenders Company 2017 Limited at 38.09 per cent and Dutch airline KLM at 7.76 per cent.
Other shareholders include Kenya Airways employees at 2.44 per cent, while the remaining shares are spread across other seven shareholders.
On Tuesday, March 26, KQ posted an operating profit of Ksh10.5 billion for the first time since 2017 for the year ended December 31, 2023, a turn-around from an operating loss of Ksh5.6 billion in 2022, a 287% growth.
President William Ruto jets into Kenya from Switzerland on June 17, 2024. /PCS