, NAIROBI, Kenya, Aug 2 – The National Civil Society Congress now says the government should not pump more money into Kenya Airways (KQ) until a full probe determines what is ailing the airline.
National Civil Society Congress President Morris Odhiambo called on concerned authorities to immediately disclose the problems at the airline so that the public, which partly owns KQ shares, knows the truth.
“If there are further cases of impropriety on the part of former and present managers, action must be taken immediately. It is very difficult to fight corruption where information flow is poor. Corruption thrives in the dark,” he said.
The national carrier posted net loss of Sh25.7billion in its 2015 full year results from a net loss of Sh3.3billion in 2014, representing a 661 percent drop.
The management attributed the loss to volatility of exchange rates, intense competition especially from Middle East carriers as well as terrorism that led to travel advisories.
“Before any action is taken, Kenyans deserve to know the truth, accountability must be taken, and Sh25.7 billion is not a small number,” he said.
He says the loss comes closely after President Uhuru Kenyatta questioned a contract for provision of transport services at the Jomo Kenyatta International Airport (JKIA),.
“This could mean that impropriety at the airline could be bigger than expected,” he added.
The airline received Sh4.2 billion from the government as a bailout plan that will see it get back to profitability.
KQ Chief Executive Officer Mbuvi Ngunze also revealed that the national airline is now seeking $200 million (Sh20 billion) capital from Afrexim Bank that will help refinance the business.
“The 200 million dollars, which we have not received yet, will both help in the in the operations going forward as well as try to service the few debts we have here and there. Afrexim have been our partner and I remember they also guided us in getting the Sh1.9billion for expansion a while back,” Ngunze said during an investors’ briefing on Thursday.
A financial analyst told the Senate committee probing Kenya Airways that the proposed bailout of the airline may be inconsequential if the airline does not change its model of operation.
Martin Odipo said the airline must restructure how the business is carried out.
“Even if we pump Sh30billion to the airline, unless they have another model, I don’t see it going anywhere. If they have to continue with the airline the model must change. The debts are high and the losses worse,” stated Odipo.
Odipo proposed that the bailout monies to be given to the ‘pride of Africa’ should go in as a debt so that it does not dilute the current shareholding.