Economics

2NK SACCO set to Acquire Kenya Airways Early Next Month

Plans are at an advanced stage for 2NK Sacco to acquire Kenya Airways as the government gets radical about turning the fortunes around for the troubled national carrier.

In the new revival plans, the government of Kenya will cede its 48.9% stake in the company to 2NK SACCO for an undisclosed amount of money in the range of millions, while KLM will reduce its stake in the airline from 7.8% to 3%. This will give 2NK a controlling majority of 53.7%.

The acquisition will see Kenya Airways rebranded to 2NKenya Airways (2NKQ), with a promise for return to profitability within 100 days.

Major Overhaul

For the record, 2NK is not out to experiment in a new industry. It has all it takes. The SACCO chairman outlined the grand vision that they have and how they have been pleading with the government to let them run 2NKQ

“2NK has a record of success in the transport industry. We have brought sanity to the matatu industry in the routes that we operate and this is a good time to extend the same to air travel. You are going to see a radical change in the way air travel works as we make it affordable and convenient for everybody.”

An illustration of standing passengers in the new 2N Kenya Airways

Some of the changes expected include an overhaul of the cabin design, with an introduction of standing passengers for local fights. “We are coming up with a new design where passengers can stand (vertical seat) for 45 minutes from Nairobi to Mombasa and pay only KShs 1500. This will increase the capacity of the Boeing 737-800 from the current 145 to 389. With prices dropped, we will have a full capacity and be able to make 60 trips every day between Nairobi and Mombasa. That alone translates to 70 million in revenue every day from just one route.”

 From the preliminary analysis, the maths is right.

Successful SACCO

While the acquisition and rebranding to 2NKQ seems unconventional, there is nothing to lose (fingers crossed) since the ailing airliner has not made a coin in the last decade. In fact, in the first quarter this year KQ only made a profit from selling lost and stolen luggage, although the gains made were reversed by ban on both local and international flights.

The government and other shareholders are hopeful that something good will come from the new venture, while some drivers working with 2NK could see fortunes turn if they upgrade to become pilots.

Parliament Approval

The deal will have to go through parliament approval but this may not be an obstacle since the matatu industry and the parliamentarians speak the same language.

“We will be meeting with the MPs to ‘discuss’ this new development in the hope that they will support us. We are even willing to partner with other Matatu operators if they demand that we also include their regions. We already have a budget for parliament.”

The current staff at KQ will also not lose their jobs but the could be redeployed to other roles within the wider 2NKQ ecosystem. “You might soon find a air hostess serving you on the Nairobi – Nakuru route. This will be the new normal.”

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