Nationalizing Kenya Airways? We have walked that path before. Please drop the plan.

Matters Kenya Airways.

While KQ team had proposed a SPV to be allowed to run JKIA it failed to get the nod and at the end the plan was abandoned.

Outgoing MD made it clear, if KQ is not given the approval to take over JKIA then it will be a dead end for KQ. He has finally resigned and waiting to exit come December.

Well our Honourable Members have now been left to decide the destiny of our national carrier. While some have proposed privatisation others are now pushing for full nationalisation.

The ones supporting full nationalisation claim that Ethiopia, Rwanda and even Emirates are all run and owned by the state hence why they are successful. Well those three countries have a different mindset and maybe even a unique DNA.

It is clear that we at times actually many times suffer from serious selective amnesia. Why would anyone forget that KQ was at one time GOK owned 100% and it was one of the worst times when it was run like most of our badly run parastatals. It was so bad that flights hardly left on time and more often than not you find yourself getting bumped out to create space for some last minute high ranking state official with his family. A head of state could virtually hijack an entire commercial aircraft for days on end on some state visit completely disrupting the flight schedules. It was at one time worse than a matatu and all that happened when it was state-owned.

Then Brian Davies walked in and carried out serious radical surgery and KQ even got listed in 1995. It was one of the few shares that you were proud to own. When Brian Davies exited the scene one of our own again showed up and sent it back to the rat hole.

I am totally against full state ownership for the following reasons .

1. We just don’t have the business mindset to separate what is state and what is personal. The moment it is state owned any high-ranking official will call the shots . Don’t look any further , National Bank , NHIF, Kenya Pipeline , Kenya Power et al. Please don’t drag in KCB and claim it is state owned. leadership at KCB is no nonsense but a strict CBK and a strict Governor are also not allowing any games to be played there . CBK is doing that role as a regulator.

2. Even under the current set up most of those aircrafts are leased and truth be said they belong to some of us . If someone is able to buy a plane and lease it to KQ they should indeed buy the airline and let them show us how great they are in business.

3. It is also clear that KQ needs serious radical surgery and more so downsizing then seek a fresh growth plan once again. KQ need to rationalize their staffing and inevitably many will have to leave but the moment you touch that then all hell is let loose. I am not surprised that the union leader is already supporting nationalization since he very well knows that siesta begins as soon as GOK takes over 100%. Show me one guy who has been fired by goverment for non performance.

My proposal on way forward.

1. GOK has no business sending good money after bad money . Seek a strategic investor to do that . If we bail out KQ once again it will NOT be the end of it . Please prepare for more bailouts using tax payers money . Please keep in mind that the faceless firms that have leased the planes to KQ are happy with this arrangement.

2. Get a serious strategic investor to buy majority shareholding . Can you imagine if Emirates were approached and in return GOK was to retain say 30% while the strategic investor takes 70%.

3. Any serious airline today is hungry to penetrate Africa. KQ is already well positioned flying to 42 countries. We are weak on cross continental and good for governance and that is where say Emirates come in. I am choosing Emirates because I find them hungry truly hungry for Africa and Nairobi becomes their hub in Africa . It is the only way we can deal with Ethiopian who have simply made leaps and bounds.

4. A strategic investor will then take charge and make it work . The faceless investors who are currently guaranteed of returns by GOK bailouts will have to take a walk including the employees who are not used to performance contracting.

There is nothing about KQ that makes it state strategic installation . It is already badly run for two decades , what is so strategic about a loss making outfit in billions of an airline? Folks it is nothing but a cow to be milked dry.

I am not for Qatar with all their issues against the rest of the GCC . I am pretty sure no European airline has the appetite for Africa hence even KLM is pussy footing to commit any fresh funds. It is about time for a fresh new suitor. Let KLM also ship out.

KQ maybe damaged goods but trust me serious investors will jump in at anytime as long as the rent seekers are paid off once and for all and kept far far away.

To Honourbale MPs. Please reject completely any plans to nationalise KQ. Please drain the swamp let a new player come in and on one condition to the investor they must retain the name Kenya Airways maybe Kenya Airways operated by XYZ and JKIA and by extension Mombasa remain a hub.

Any other plan is simply wasting tax payers money .

Yours truly

Mohammed Hersi

2 thoughts on “Nationalizing Kenya Airways? We have walked that path before. Please drop the plan.”

  1. 100%!!! Your first reason said enough! You didn’t even have to go any further than that! A patriarchal government lacking core competencies and with archaic values to boot, has no business running any business.

    Liked by 1 person

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