Kenya Airways Proposes State-Run Entity as Airport Bid Fails
Kenya Airways Proposes State-Run Structure as Airport Bid Fails
(Bloomberg) -- Kenya Airways Plc. is willing to operate under a state-owned holding company after the troubled airline failed in its bid to jointly run the country’s main airport, according to Chairman Michael Joseph.
Lawmakers in the East African nation are expected to issue alternative proposals, including the possible partial nationalization of Kenya Airways, after they last month rejected the airline’s proposal to operate Jomo Kenyatta International Airport with the state-owned Kenya Airports Authority, Joseph said in an interview Monday.
The airline, which reported a 5.95 billion shillings ($59 million) full-year loss, is proposing a model similar to Emirates Airline and Ethiopian Airlines Enterprise, which operate as units of state-owned holding companies. Such an arrangement would enable able it to double its fleet in five years, Joseph said.
“We need the financial structure to enable us to do that,” he said. “It might not be cash, it might be the balance sheet which is why the airport deal was very important for us.”
Kenyan lawmakers may release a report with recommendations on the future of the airline as early as Tuesday.
Kenya Airways, which is 48.9% owned by the government, is also on the hunt for a chief executive officer after Sebastian Mikosz said he would step down before the end of his three-year contract.
“A mature, seasoned executive is what I will hire,” Joseph said. “There’s not many around. If it’s delayed beyond December there’ll be still strong leadership.”
To contact the reporter on this story: Bella Genga in Nairobi at bgenga2@bloomberg.net
To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Hilton Shone, Michael Gunn
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