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Kenya

KALPA backs KQ’s nationalization on condition of in-depth investigation of airlines’ woes

KALPA has also called on the Government to incorporate the Deloitte Forensic Audit Report and The Senate Report in the nationalization process and include key stakeholders’ contributions/FILE

NAIROBI, Kenya, Sept 10 – The nationalization of Kenya Airways will only succeed if the Government thoroughly investigates some of the issues that have afflicted the company in the recent years.

This is according to the Kenya Airline Pilots Association (KALPA) which has also called on the Government to incorporate the Deloitte Forensic Audit Report and The Senate Report in the nationalization process and include key stakeholders’ contributions.

“The Association is ready to present submissions to the Government to ensure a smooth and beneficial turnaround process,” KALPA General Secretary Captain Murithi Nyagah said.

In February 2016, the airline hired Deloitte to identify areas of weakness in its operations after the company sank into debts and losses in 2014. The airline reported a Sh25.7 billion after-tax loss for the year ended March 2015, followed by a Sh10.95 billion net loss for the six months to September.

The audit trail revealed a story of plunder and theft; fraud was involved in many areas of the company’s operations, from ticketing, fuel and accounting.

Senate’s report also revealed a similar story. The airline was afflicted by poor investment decisions by management of buying and leasing aircrafts, fuel hedging, expensive ticketing and frequent cancellation of flights causing inconvenience and poor relationship with passengers.

The nationalization proposal was fronted and voted for in July in parliament in a bid to save the national carrier from mounting debts.

In a previous media interview, Parliament’s transport Committee David Pkosing pushed for nationalization of the airline saying it would exempt it from taxes om engines, maintenance and fuel which would allow it to sell cheaper tickets.

Currently, KQ charges more than competitors, forcing price sensitive passengers to opt for competitors who include Ethiopian Airlines and Rwanda’s flag carrier airline, RwandAir.

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