Government is seeking Ksh.170 billion relief to buy out its national carrier, Kenya Airways as it moves towards cutting funding by the end of the year.
According to Kurunzi, the Kenyan government is in talks with several possible strategic partners in an effort to find a buyer for Kenya Airways’ Ksh.170 billion (about $1.6 billion) debt. Kenya Airways, the country’s flag carrier airline, has been struggling financially in recent years, and the government hopes that by finding a strategic partner to take over the airline’s debt, the company will be able to turnaround its financial situation and become profitable once again.
Speaking before the Senate Transport and Infrastructure Committee, Transport CS. Kipchumba Murkomen traced the genesis of the airline’s woes back to the Mawingu project which he says put the national carrier in a tailspin.
Murkomen said that the Mawingu project, which was designed to upgrade the national carrier’s fleet, actually put the airline in a precarious financial position.
“The Mawingu project was supposed to be the panacea for Kenya Airways but it has turned out to be the albatross around its neck,” he said.
Murkomen added that the government will continue to support the airline even as it restructures its debts.
Murkomen’s statement implies that the airline’s current financial struggles are due to bad investments. This is a cause for concern, as it means that the airline may not be able to recover from its current difficulties. The statement also raises questions about the airline’s management, as it suggests that they may have made poor decisions in the past.
“We are currently working on a plan to bring in a strategic investor, and you can expect to see a communication from the cabinet by June. Our goal is to stop providing financial support for the airline by next year, but we will have a road map to this by mid-this year. This was stated by Murkomen”.
Senator Wambua’s comments come at a time when the Kenyan government is mulling over a possible bailout for the struggling national carrier. If the airline is still making losses, then the government should nest down to save taxpayers’ money, Wambua stated. He added that the current situation is not sustainable and that something needs to be done to turn the airline around.
Kenyans are angry and upset after the recent crash of an Ethiopian Airlines plane. This is the second Ethiopian Airlines crash in the last five months, and many people are questioning the safety of the airline. Wambua, a Kenyan citizen, posed a valid question to the government and airline officials. He asked them what they are going to do differently to help this airline, and if it wouldn’t be better to just shut it down and start afresh. Wambua’s question is one that many Kenyans are asking, and they deserve to know what the government and airline are going to do to ensure safety in the future.
In an interview with Kurunzi, Murkomen stated that the airline is still commercially viable and would immediately turn a profit once the strategic investor comes in. He went on to say that the airline has experienced some turbulence in the past, but with the right investment and management, it could be a success story once again.
“KQ is a very viable company. The only thing that is holding them back is the debt they incurred during project . The debt is about $1.6B and if that is taken away today then KQ will be profitable the next day,” said Murkomen.
According to Murkomen, the only thing holding Kenya Airways (KQ) back from profitability is the $1.6 billion debt the company incurred during the Mawingu project. If that debt could be paid off, KQ would become profitable overnight.
Elgeyo Marakwet Senator, Kipchumba Murkomen, has announced that the government is looking into renovating and expanding the Jomo Kenyatta International Airport. He added that this is part of the government’s plan to bring the airport up to world-class standards.
The Senator made the announcement during a meeting with delegates from the Kenya Civil Aviation Authority. He said that the authority had already presented a report on the matter to the government, and that they were now waiting for the green light to proceed with the project.
If the expansion and renovation goes ahead as planned, it would be a major boon for the Kenyan economy.
