Kenya Parliament approved proposal for nationalisation of Kenya Airways but can they meet up with other Eastern Airline?

Lawmakers in Kenya has finally accepted the proposal for the nationalisation of Kenya Airways. Kenya Airways which has for a long time been in the airline business was before the flag carrier airline of Kenya.

However, the approval which has taken so long has finally been accepted by lawmakers. The proposal was submitted by Kenya parliamentary transport committee.

According to their report, the proposal will entail delisting Kenya Airways and buying out other shareholders. They also proposed to create a holding company with four subsidiaries including the carrier and the Jomo Kenyatta International Airport.

#Kenya's parliament accepts proposal to nationalise Kenya Airways https://t.co/aK6HPq6ZA4

— Reuters Africa (@ReutersAfrica) July 23, 2019

Meanwhile, the Airline had proposed that the government allows it to participate in operating the nation’s biggest airport. That they should also invest in the airport and keep part of the income from the facility. This was immediately rejected by Lawmakers.

WHY WAS IT FINALLY ACCEPTED

After a vote on tuesday, 23 july 2019, Lawmaker finally accepted approving the nationalisation of Kenya Airways. The aim for accepting is a way of rescuing it from mounting debts. On the other hand, the proposal comes with a raft of tax exemptions. This will help boost the airline’s competitiveness in a region where it has surrender market share to state-owned rivals according to the lawmakers.

The proposal is vital as Kenya Airline lost a reported 5.95 billion shillings (US$59 million) last year. These made them to lose market value to the likes of  Ethiopian Airlines and RwandAir.

Furthermore, the nationalisation of the airline will help them promote its base in the East African nation’s capital, Nairobi. Currently, Kenya government owns 48.9%, Air France-KLM owns 7.8%,  a group of 11 lenders collectively own 38.1% while companies workers own the rest.

Kenya parliament approve proposal for nationalisation of Kenya Airways but can they meet up with other Eastern Airline?

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