The Government intends to establish Kenya Aviation Corporation, an entity that it will use to take over operations of Kenya Airways upon it being nationalized and delisted from the Nairobi Securities Exchange (NSE).
The draft law (National Aviation Management Bill, 2020), which has already been tabled in parliament, intends to establish this corporation as a holding company for Kenya Airways and Kenya Airports Authority (KAA).
Kenya Airways, as one of the entities under this state corporation, will carry on business as carriers of air passengers, cargo, mail and goods in Kenya and elsewhere. The airline will perform its functions as directed by the Kenya Aviation Corporation Board and will have an initial share capital of KSh7.5 billion.
The draft law also proposes to establish the National Civil Aviation Council chaired by the President. Other members include Cabinet Secretaries in charge of Transport, Internal Security, National Treasury, Attorney-General and the Kenya Air force Commander.
The Kenya Aviation Corporation will have its affairs managed by a Board of Directors consisting of the Chairperson appointed by the President.
Others on the board include the Attorney-General or their representative, Cabinet Secretary in charge of National Treasury Planning, the Principal Secretary of the Transport Ministry, the Chief Executive Officer; the Managing Directors of Kenya Airways and the Kenya Airports Authority; and four independent non—executive Board members appointed by the Cabinet Secretary.
The Chairperson and the Independent Non— Executive Board Members shall hold office for a period of three years and shall be eligible for re-appointment for one further term of three years.
Nationalization of financially-crippled KQ has been running behind schedule, owing to disruptive effects of COVID-19 on the global aviation business.
The State divested from the loss-making KQ more that two decades ago. It, however, retains a 48.9% stake with 7.8% controlled by French aviation firm, KLM.