Economy
President Ruto meets Delta Air, to sell all State stake in Kenya Airways (KQ)
Monday December 19 2022
Ruto meets Delta Air, wants to sell all State stake in KQ. PHOTO | LUCY WANJIRU | NMG
President William Ruto met top executives of Delta Air Lines in his American trip where he launched the government bid to sell its entire 48.9 per cent stake in Kenya Airways.
The President held a meeting with executives from Delta Air Lines Inc., the largest US carrier by market value, last Thursday.
He, however, declined to provide details of the talks as Kenya seeks a cash-flush foreign airline as a strategic investor in the national carrier to offer expertise and cut its reliance on Treasury handouts for operational cash.
“I’m willing to sell the whole of Kenya Airways Plc,” Dr Ruto told Bloomberg News on the sidelines of the US-Africa Leaders Summit in Washington DC on Friday. “I’m not in the business of running an airline that just has a Kenyan flag, that’s not my business.”
US President Joe Biden last week hosted the US-Africa summit and will discuss the 2023 elections and democracy in the continent with about 50 African Heads of State.
Over 300 American and African companies met with heads of different delegations to talk about investments in critical sectors, the White House said Tuesday.
ALSO READ: Ruto seeks KQ sale to strategic investor in US trip
“Discussions with Delta are at a preliminary stage,” Dr Ruto said in the US.
“The government is looking for partnerships that will make Kenya Airways a profitable entity whatever that means, in whatever configuration, whatever form it takes,” he added.
Delta has previously shown interest for a piece of Kenya air traffic.
In 2009, the airline halted plans to launch four direct flights a week between Nairobi and Atlanta via Dakar after the US Transportation Security Administration (TSA) failed to clear the new route, citing “noted security vulnerabilities in and around Nairobi.”
This saw Kenya summon the then US ambassador to explain the last-minute cancellation of new Delta Air Lines flights on security fears.
The government in 1995 sold a 26 percent stake in KQ to Dutch airline KLM and sold a further 22 percent stake to local shareholders through an initial public offering at the Nairobi bourse in 1996.
The deal offered KLM seats on the KQ board, the right to appoint certain executives, in particular the CFO, and act as the technical partner for the national carrier.
KLM has reduced its stake from 26.7 per cent after the conversion of State debt and bank loans to equity diluted the firm’s ownership to 7.76 per cent.
The multinational had expressed its desire to exit KQ when the government opted to nationalise the airline.
In 2021, Kenya Airways agreed with Air France-KLM to end a code share for Africa-Europe routes.
The national carrier has received multi-billion shilling State bailouts amid delayed recovery from a travel slump following Covid-19.
The fresh restructuring plan comes after the State dropped the favoured long-term solution that was anchored on nationalisation of the airline.
READ: Kenya Airways escalates fight with pilots, seeks to dissolve CBA
The plan approved by MPs in July 2019 would have led to the delisting of the airline from the Nairobi Securities Exchange (NSE).
A law to pave the way for the nationalisation of the airline, which had been proposed before the pandemic, is before Parliament.
Kenya wanted to emulate countries such as Ethiopia, which run air transport assets — from airports to fuelling operations —under a single company, using funds from the more profitable parts to support others.
Under the model approved by MPs, Kenya Airways would become one of four subsidiaries in an aviation holding company.
The others would be Jomo Kenyatta International Airport, an aviation college and the Kenya Airports Authority operating all other airports.
The airline, which has been surviving on State bailouts since the Covid-19 pandemic, reported an Sh9.8 billion loss in August — a better performance than the Sh11.48 billion loss it recorded in the same period a year earlier.
Share this news
This Year’s Most Read News Stories
Villagers on Pemba Island lack clean sanitized water
Eight villages on Pemba Island have lacked clean and safe water service while complaining to the Zanzibar Water Authority for failing to solve the water problem in their villages.Continue Reading
Juma Haji Duni: A legacy of resilience and leadership in Zanzibar politics
The recurring inefficiency among some contractors could lead the government to favour foreign firms, sparking criticism from stakeholders advocating for local participationContinue Reading
Tanzania: Exim to Raise Fund for Mental Health Facilities Upgrades
EXIM Bank to raise 300m/- over the next three years for financing essential services and infrastructure upgrades in mental health facilities.
The bank’s Head of Marketing and Communications Stanley Kafu unveiled this when introducing Exim Bima Festival 2024 as a platform for bringing together individuals, organisations and various sectors for raising the funds.
“Exim’s initiative aligns with the government’s broader goals to ensure that every citizen has access to quality healthcare, including mental health services,” he said.
The initiative, which is one of the events for celebrating the bank’s 27th anniversary is scheduled for Wednesday this week in Dar es Salaam.
Mr Kafu highlights that this year’s festival is not only about raising awareness of the importance of insurance in the society but also focuses on enhancing access to mental health services and improving the overall well-being of the nation.
Statistics from the Ministry of Health shows a staggering 82 per cent increase in mental health cases over the past decade.
Mental cases have risen from 386,358 in 2012 to 2,102,726 in 2021, making the need for mental health services more urgent than ever.
ALSO READ: NBC’s Saving Campaign Empowers Customers Nationwide
Unfortunately, the country’s ability to address this growing challenge is hindered by a shortage of mental health professionals, infrastructure, medical equipment and essential medication.
For example, out of the 28 regions in the country, only five have facilities that provide adequate mental health services.
The most affected group is the youth aged 15 to 39, who represent the nation’s workforce, underscoring the need for intensified efforts to safeguard this generation for Tanzania’s future well-being and development.
Mr Kafu said by improving mental health services, Exim aims to contribute to the creation of a network of communities that can access care quickly and affordably.
Exim Insurance Department Manager Tike Mwakyoma said they are appreciating the support from partners in the insurance industry, who have stood by them since the last festival.
“Let’s continue this unity for the development of all Tanzanians and our nation as a whole,” the manager said.
Source: allafrica.com
