Shareholders in the airline, which has been losing money for the past three and a half years and took a bridging to stay in the air, include the government and Air France – KLM.
The recommendation by the Senate committee that was formed in June will go to the upper house of Kenya’s parliament. If approved, the government will be have to act, a parliamentary official said.
Last month, the airline reported a smaller pretax loss of 11.9 billion shillings ($117 million) in the six months to September and promised to cut costs and sell $146 million in assets in its attempt to return to profit.
“Given the importance of Kenya Airways to the Kenyan economy, the committee recommends that the shareholders inject new capital into the airline to facilitate the turnaround of the airline,” the senate committee said in a report seen by Reuters.
An spokeswoman for the airline said the company had just received the report and was studying it.
The senators set conditions for a bailout which include demanding major shareholders to overhaul the board and requiring a restructuring of the management team to ensure it had “sufficient skills and experience” to turn the company around.
It also demanded the hiring of a new marketing director with experience to turn around the ticketing system and “ensure proper accounting of revenue from market sales”.
The committee recommended that the Finance Ministry initiate a process of “providing a favourable tax regime”, including possible tax breaks to help the airline and support Nairobi’s bid to be come an aviation hub.
Kenya’s effort to create make a regional hub faces competition from next door Ethiopia, where state-owned Ethiopia Airlines has expanded to become Africa’s largest carrier.
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