obiero wrote:Ericsson wrote:obiero wrote:Fyatu wrote:I am not a sharehoder of KQ but would like to comment about the PPP document posted by @Obiero.
On page 69. of the document there are two graphs. One showing competition by other airlines for KQ at Nairobi hub(JKIA) and another showing competition for Ethiopian in Addis. The KQ graph on the left shows a steep rise in competition circa 2015-2016. I suspect the cause of this sharp rise in competition was a government policy to open airspace(reference needed). If this is the cause then government can write another policy revoking the other policy.
On page 8,of the document they list one of the benefits of the SPV as infrastructure upgrade. They further talk of runway efficiency without building a second runway. They also talk about building terminal 1E permanently and upgrading other terminals etc in page 10.
The question is,.....
is the government/KAA/ministry of transport not able to build infrastructure?
Who has been running JKIA if not GoK/KAA?
So if JKIA is fully owned by GOK and Bole in Addis is fully owned by govt. of Ethiopia, why do we need SPV when government and MPs can write policy/legislation to ensure all operations at JKIA are consolidated and airspace is skewed towards KQ's favour?Do we need SPV for this?
Where is the SPV going to get money to build terminals, runway and buy 20 planes?Is it going to be our taxes since the document states that the reasons Ethiopian, Rwandair and Air Tanzania are competing well is because their own hubs are owned by their governments/tax payers/wananinchi.
Is this document telling Kenyans that KQ proposes that government of Kenya takes over JKIA, buys out all shares of KQ so as KQ becomes 100% govt. owned like Air Tanzania?Do we need SPV to achieve this?
@Fyatu the only profitable airports in Kenya are Wilson and JKIA.. That's why KQ needs JKIA whose success is likely to spur other airports into profitability.. GoK doesn't have any more funds to throw at KAA or KQ, thus the SPV
KAA can source for loans on its own,use the money to develop the Airports in kenya and repay without the assistance of KQ
@Ericsson that will not address the competitive positioning of KQ. The airline is under attack by its rivals and needs a model that's aligned to stay in the game
@Obiero, from my understanding of the PPP document, KQ argues that the reason that Ethiopian and Rwandair are succeeding is that they are fully(100%) owned by respective governments. Also,that their key hubs Bole and Kigali are also 100% owned by government.
My question is, isn't JKIA 100% owned by government of Kenya? If not, who are the other shareholders?
Furthermore, If KQ fully reverts back to GoK, then it purely becomes mali ya umma and hence a taxpayers asset/liability. So where is the need for SPV? Are Kenyan taxpayers going to be funding a private company(SPV) in the guise of 100% government owned?
Dumb money becomes dumb only when it listens to smart money