Kenya Airways seeks to run Nairobi airport to recover losses

June 08, 2018: Kenya Airways is just few miles away from winning an approval to run the country’s main airport in Nairobi, said Michael Joseph, chairman.

Joseph said the loss-making airline had proposed forming a special purpose vehicle with state-run Kenya Airports Authority (KAA) allowing the airline to run Jomo Kenyatta International Airport for a minimum of 30 years.

Kenya Airways, which is owned 48.9 percent by the government and 7.8 percent by Air France/KLM, had $2 billion of debt restructured by the government and shareholders last year and it is planning new routes as it tries to recover from years of loss.

The plan to run Jomo Kenyatta airport is vital for the national flag carrier’s survival as it has faced limited choices after last year’s financial restructuring. The carrier also faces stiff competition from state-backed carriers, including Gulf-based Qatar and Emirates.

Joseph said the cabinet discussed the proposal and gave the “go-ahead” last week. The plan to change Kenya Airways’ model, which will require parliamentary approval, will be finalised sometime this year, he said.

Kenya Airways proposes to pay the airport authority concession fees and to run other profitable services at the airport including catering, fuel distribution, cargo and ground services facilities and maintenance. The concession fees have not yet been agreed upon.