African Governments advised to follow Kenya Airways model
African governments are being advised by airline officials to stop running airlines and follow Kenya airlines model maintaining some ownership whilst leaving the operations of the business to private operators who are experts in the area.
At an investors' breakfast briefing in Nairobi last week, Chief Executive Officer of one of the leading African airlines, Kenya Airways, Titus Naikuni, said that African governments should stop trying to run airlines and leave the operations to the experts.
"My advice to Tanzania and other African countries is that if they want to have profitable national carriers they should move the airline business from the governments. A government can still have some ownership but let the people who know how to run an airline do it," Naikuni said.
The Kenya government has a 23 percent stake in Kenya Airways but the government is not involved in the running or operations of the airline. The KLM group have a 26 percent stake in the airline but the majority of the shares (61 percent) are owned by public investors across Kenya and Africa.
Kenya Airways provide numerous holidays in Africa to travellers from all over the world. The airline operates flights to Nairobi, Dar es Salaam, Rwanda, Johannesburg, the Seychelles, Ghana, Liberia, Egypt, Sudan, Muscat, Dubai, Honk Kong, Bangkok, Paris, Amsterdam and London.
The recent statement came in light of the struggles of the Air Tanzania Company Limited (ATCL) who are struggling after an unsuccessful partnership with South African Airways. The government have since taken over the operations but things have worsened considerably. The government are looking for private investors but experts have advised them to liquidate the company and start again.
Naikuni has ruled out any possibility of a relationship with the struggling ATCL, despite previously tried efforts. He explained:
"We already have a good relationship with Precision Air through a 49 per cent ownership. Why should we need the second airline in Tanzania? Why don't we look at a relationship between ATCL and Precision Air, for example?"
However, despite this statement, Precision Air said that the airline is not looking to buy any shares in ATCL at present but is open to discussions. Managing Director of Precision Air, Alfonse Kioko, said:
"We tried in the past to acquire some stake in the ATCL when the government was looking for an investor but the response was not positive. So we gave up. We are, however, open to any kind of relationship, not necessarily through buying shares," he said.
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