Kenya Airways Future Hangs In The Balance

The government of Kenya is seeking to rescue national carrier Kenya Airways from collapse. However, plans to effect a merger between the airline and the Kenya Airports Authority have faltered after a parliamentary committee recommended the suspension of the proposed merger. 

It looks as though President Kenyatta may overrule the committee with his chief of staff Nzioka Waita telling the press this weekend that there is no going back from the deal.  

“The position of the Cabinet is that our aviation sector must be viewed as a strategic for economic growth instrument — one that is critical to the expansion of tourism and attraction of foreign investment,” Waita is quotes as saying.

The Speaker of the National Assembly has also transferred the question of the merger to a different committee, one that is dominated by MPs from the President’s Jubilee party. This is significant given that opposition to the deal was seen to be fuelled by concerns that the deal represents a conflict of interest for the President as Kenya Airways owes money to the Commercial Bank of Africa, and the bank is majority owned by the President’s family.