International Finance

Kenya Airways to revamp JV agreement with Air France-KLM

The Kenyan airlines is seeking renegotiations over cost and revenue sharing deal and the ability to enter into agreements with other airlines

Kenya Airways is seeking a renegotiation of a 24 year old partnership with Air France-KLM. The Kenyan airline wants to renegotiate the cost and revenue sharing deal between the two airlines. It also wants to discuss its ability to enter into agreements with other airlines.

According to reports, Kenya Airways has removed all Air France-KLM’s employees including Chief Operations Officer Jan de Vegt.

Responding to the Kenya Airways’ renegotiations demand, Air France-KLM has agreed to come up with a new joint venture agreement which will come into effect as early as next year.

With the renewed agreement, Kenya Airways plans to enter into agreement with other carriers such as Deutsche Lufthansa and British Airways. Previously, Kenya Airways’ agreement with the European carrier didn’t allow it to enter into an agreement with other carriers.

Earlier this year, the Kenyan Parliament voted in favor of nationalising the airline as the partly state-owned carrier’s losses have almost tripled in the first half of the year. Currently, Air France-KLM owns a 7.8 percent stake in Kenya Airways. The state remains the biggest shareholder in the airline.

Recently, the airline withdrew its bid to run the Jomo Kenyatta International Airport, which is considered to be the busiest airport in Kenya.

In a statement given to the media, the company said, “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 (Privately Initiated Investment Proposal) did not take off and a new direction – nationalisation was adopted.”

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