MPs are demanding an investigation into the woes facing Kenya Airways, citing questionable management and a lopsided agreement with a partner foreign airline. The lawmakers protested the ‘skewed’ ownership agreement between the national carrier and Dutch airline, KLM, as well as the manner in which KQ has been run resulting to its being “technically insolvent.” Majority Leader Aden Duale yesterday moved a motion to suspend business to discuss the “imminent collapse” of the national airline.
But the debate veered to sparring between CORD and Jubilee MPs over whichside was to blame for the situation. “Kenya Airways has been performing dismally in the last four years, reporting a cumulative loss before tax of Sh71.4 billion… This has resulted in the airline being technically insolvent with a negative equity of over Sh36 billion. There are overdue payments of over Sh15 billion to creditors and the short team loan position is currently in excess of Sh140 billion.
This operational mess has been presided over by the former and the current management of the airline,” said Mr Duale. Leader of Minority Jakoyo Midiwo (Gem) led calls for the formation of a select committee, which he said will get to the bottom of the mess at KQ. READ MORE Don’t let politics cloud Kenya Airways woes Raila dismisses report on KQ cargo deal change How struggling carrier lost Sh2.2b in flawed buggage billing scheme Claims of ticket overpricing, irregular leasing of aircraft and a poorly negotiated agreement with its partners have been cited as being responsible for the poor state of the airline.
MPs observed that the government owns 29 per cent stake in the airline and has been pumping in billions of shillings, which must be accounted for. They also criticised the agreement which they said favoured KLM. “Some decisions have to be made on this matter. According to the MoU between KQ and KLM, the CEO cannot be sacked without the concurrence of KLM. At the same time, the current head of network planning is a KLM employee. This is a conflicted situation and some decisions have been made that suggest that the individual is working for the interests of KLM and not KQ,” said Duale.
He called for a renegotiation of the ‘skewed’ ownership agreement. The MPs were united in calling for action against current Chief Executive Officer Mbuvi Ngunze and his predecessorn Titus Naikunin for allegedly presiding over the “imminent collapse” of the airline.