Kenya Airways (KQ, Nairobi Jomo Kenyatta) has dropped its proposal to take over Nairobi Jomo Kenyatta airport operations and run the airport under a 30-year concession, the carrier confirmed in a statement to the local media.

"Following a board decision at the last board meeting held on August 27, 2019, we are formally withdrawing the Privately Initiated Investment Proposal (PIIP) from the consideration of Kenya Airports Authority (KAA), the Public-Private Partnership Committee (PPP) Committee of the National Treasury. As you may be aware, the PIIP did not take off and a new direction, nationalisation, was adopted," the airline confirmed.

The proposal to merge the carrier and KAA, which operates Nairobi airport, was first floated in 2018. Since then, the plan has been a subject of heated political debate. In April, the government put the plan on the back burner and subsequently, in July, approved an alternative course of action based on the re-nationalisation of the carrier.

"There is a team that is currently working on a Bill that will provide for how the nationalisation process will be managed. The expectation is that the Bill will be tabled in Parliament for debate fairly soon. If passed, and after presidential assent, it will then become law," the airline said.

The carrier said it was willing to engage with all stakeholders to create a better business environment for aviation in Kenya.

In June this year, CEO Sebastian Mikosz told ch-aviation that after re-nationalisation there would be a window of opportunity to combine the operations of the state-owned airline and its hub airport.

Kenya Airways is currently 48.9% owned by the government. A consortium of private banks holds another 38.1% of the shares after a debt-for-equity swap, while KLM Royal Dutch Airlines controls a 7.8% stake. The remainder is held by small shareholders at the stock markets in Kenya, Uganda, and Tanzania. The re-nationalisation is expected to take 21 months and will result in the creation of a holding company owning Kenya Airways, KAA, the Nairobi airport operator, and a new aviation college.