Kenyan parliamentarians have rejected a proposal to exclude the Kenya Airports Authority (KAA) from a new holding company mooted as part of the nationalisation of Kenya Airways (KQ, Nairobi Jomo Kenyatta).

This is according to a report tabled in the Kenyan Parliament by the National Assembly Transport Committee. It follows a second round of public participation to get feedback on the proposed National Aviation Management Bill 2020, the law that is to return the loss-making airline to state ownership, Kenyan media reports.

The Law Society of Kenya had submitted that the KAA be separated from the Kenya Aviation Corporation (KAC), the proposed new holding company which would oversee three subsidiaries: KAA, Kenya Airways, and an investment arm called the Aviation Investment Corporation. The society argued that the loss-making airline should not be merged with the profitable KAA in any arrangement that could financially burden the latter.

However, the parliamentary committee, chaired by Member of Parliament David Pkosing, said the KAA would not lose its autonomy under the proposed aviation holding company. “The Bill does not seek to merge Kenya Airways and the Kenya Airports Authority within the meaning of the Competition Act, but to consolidate the aviation assets so as to effectively compete in the international market,” the report read. KAC Board members would have to be suitably qualified with a degree in aviation, business administration, finance, audit, law, or engineering, it said.

The committee also rejected calls that President Uhuru Kenyatta should not chair a proposed National Aviation Council, that would give policy direction in aviation matters. “The President has the power to perform any executive function provided for in the Constitution or in national legislation,” it stated. Kenya's Environment Cabinet Secretary would also get a seat on the council, the committee decided, citing the importance of meteorological services in aviation.

According to the report, the committee acceded to public requests for the Salaries and Remuneration Commission to regulate salaries paid to directors and board members.

It rejected calls for no amendments to various laws that would grant exemptions to the operating entity for smoother operations. These amendments would affect the State Corporations Act, the Public Finance Management Act, the Companies Act, the Public Procurement and Asset Disposal Act, and the Public Service Commission Act.

The committee decided that the country's Transport and Environment ministries consult further on the sharing of proceeds from passenger service charges. The Meteorological Department had asked that 30% of passenger service charges be apportioned for meteorological services.

It also recommended that the Transport Cabinet Secretary regulate the allotment, usage, and reallocation of slots at Kenyan airports; and draw up rules on aeronautical studies and risk assessment as well as the safety of aircraft, vehicles, and persons using aerodromes.

The National Aviation Management Bill was first tabled in July 2020, but its implementation was delayed to allow for more public participation after Members of Parliament objected on the grounds that the public had been given insufficient time to provide input.

Kenya Airways was privatised 24 years ago but sank into debt in 2014 after a failed expansion drive, costly purchase of aircraft, and a slump in travellers after repeated terror attacks on Kenyan soil. In August 2020, it saw its first-half loss nearly double year-on-year following months of suspended air travel due to COVID-19. The airline is 48.9% state-owned, 7.8% is held by Air France-KLM, and 38% by local lenders.