KLM gets the nod in Kenya Airways sell-off.

Author:Omolo, Leo Odera

The long debated fate of Kenya Airways, the national flag carrier has now been resolved following a decision to sell 26% of its share to KLM, the Royal Dutch Airlines.

The announcement to this effect caught many people by surprise - not least because the time-table unveiled earlier this year by Kenya Airways management indicated the airlines privatisation would not be through until sometime in the mid-next year.

The choice of the KLM too was equally unexpected, as were the identifies of the four airlines that submitted bids: Germany's Lufthansa, South African Airways (SAA), Swissair, and British Airways.

The KLM bid appeared to have the remotest chance of the lot. Since Speedwing Consulting, a subsidiary of British Airways has been managing Kenya Airways under contract since 1992, the general belief was that British Airways would be the natural choice. South African Airlines because of its renowned efficiency in regional flights, was expected to be the second favourite for the take-over.

Given its intimate connection with Kenya Airways through Speedwing Consulting, British Airways was assumed to have total control over Kenya Airways privatisation and was forced to deny that it had access to vital information on the planned sale of KA and would therefore undercut other bidders.

For the better part of last year and the beginning of this, KA too, had to repeatedly issue public announcements emphasising that the Government intended the sale of the airline to be above board.

At a last press conference given before the announcement of the KLM deal, the Chairman of the airline's Board of Directors, Mr Philip Ndegwa, former Permanent Secretary in the Treasury and Chief Government Economic Adviser, denied claims by members of the opposition parties that the KA would be sold to some local politicians and "politically connected local businessmen".

Mr Ndegwa explained that contrary to the rumours, KA shares would be sold to five categories of investors with about 85% of the shareholding remaining in local hands.


To continue reading