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Kenya Airways Needs $500M Bailout After Revenue Falls By 50%2 minutes read

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The Chief Executive Officer (CEO) of Kenya Airways, Allan Kilavuka, says the airline will need at least $500m to survive the novel coronavirus (COVID-19) crisis.

Kenya Airways half-year revenue fell by almost 50%, with the airline reporting an estimated $100m in lost revenue due to the coronavirus pandemic and related lockdowns

In June, Kilavuka estimated that by the end of the year Kenya Airways woukd lose probably between $400m and $500m.

The CEO said that the carrier, which is 49% state-owned, must also be fully nationalised alongside Kenya Airports Authority, which runs the Nairobi hub, under a holding structure similar to that of regional leader Ethiopian Airlines Group.

“If we don’t restructure the airline, and take the airline as is into this organisation, then we are doing a disservice to the taxpayer,” Kilavuka said.

“Right now it is undercapitalised, given the effects of Covid.”

Kenya Airways is focused on cutting labour and plane-lease costs, its biggest fixed expenses, by $66m to the end of 2021.

Talks with unions are focused on eliminating costs without resorting to the 1,400 job cuts the company says may be needed.

Measures will need to deliver 40% savings to match continuing revenue declines, the CEO said.

In the interim, staff are drawing reduced pay and deferring the balance to a later date.

Meanwhile, Kenya Airways will resume flights to Tanzania on Monday, 21 September 2020.

The national carrier announced it would make its first flight to Tanzania’s commercial city of Dar es Salaam next week since it was suspended from flying to the neighbouring country.

Before the ban, Kenya Airways had planned two daily flights to Dar and three weekly flights to Zanzibar.

Since the return of international flights on August 1, Kenya Airways, alongside three other Kenyan airlines – AirKenya Express, Fly540, and Safarilink Aviation – had been locked out of Tanzanian airspace after Nairobi retained Dar es Salaam on the red list of nations with a high risk of coronavirus denying its citizens unrestricted entry into Kenya.

KQ has since resumed flights to 30 destinations after grounding of fleets in March by the government to stem the spread of the virus.

The reopening of the Tanzanian airspace for Kenyan carriers comes just hours after the Kenya Civil Aviation Authority (KCAA) lifted the 14-day mandatory quarantine requirement for all passengers arriving from Tanzania.

On Tuesday, KCAA released a revised list that included Tanzania, among 17 other States and territories, whose citizens are now exempt from the two-week quarantine.

Tanzania was the only East African country that had been exempted from the list, which led Tanzania Civil Aviation Authority (TCAA) to retaliate by closing its airspace for Kenyan carriers subject to review by Nairobi.

Kenya has now also eased the entry of nationals from Egypt, Ghana, Nigeria, Cameroon, The Gambia, and Sierra Leone.

East Africa Business News

Uganda Establishes First Free Zone at Entebbe Airport

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The government of Uganda through the Uganda Free Zone Authority (UFZA) has finalised plans to establish the first public free zone at Entebbe International Airport. The free zone is projected to boost export-oriented investment in the country.

The project will be implemented by the National Enterprise Corporation (NEC) on a five acre piece of land acquired from the Uganda Civil Aviation Authority (UCAA) at the Entebbe International Airport premises.

Under the arrangement, the project targets sectors which include food processing, mineral processing, warehousing, storage and simple assembly, where all operators in the public free zone will process their products for onward export through Entebbe International Airport.

The development of the Public Free Zone projected to cost UGX 48billion will, on completion house seven production units and trade houses such as offices of the Uganda Free Zones Authority, Uganda Revenue Authority, and other government offices to promote enterprise. The Government of Uganda (GoU) has already awarded UGX 12.5 Billion for the first phase of the project.

Speaking at the site handover event, Hez Kimoomi Alinda, the Uganda Free Zones Authority Executive Director, said the project is expected to contribute cargo volumes, create hundreds of direct jobs and significantly improve Uganda’s exports.

“On completion, the project will support increased production quality assurance and value addition to commodities that are widely produced by the masses to improve household incomes, create employment and eliminate poverty as well as improve the value of Uganda’s exports,” he said.

Alinda was speaking while handing over the site for the construction of the Entebbe International Airport Free Zone at which he said they had acquired five acres from the Uganda Civil Aviation Authority for the development and contracted National Enterprise Corporation, the commercial arm of the UPDF for the construction.

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Somali Petroleum Authority Appoints Independent Directors

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The Somali Petroleum Authority (SPA) has announced the appointment of six Independent Directors to its Board, each representing a Member State and one Independent Director representing the Federal Government – following the approval of the Prime Minister and the Council of Ministers.

The announcement follows the appointment of Ibrahim Hussein as Chairman and Chief Executive of the SPA, representing the Federal Government, and is in line with the provisions of the Petroleum Law.

The Board will oversee all the SPA’s activities to ensure that it develops a sustainable and competitive industry in the interests of all Somali people, in keeping with its mandate.

The newly appointed Board Members to the SPA are Asha Osman Ahmed, Vice Chair and Board Member representing Banadir Regional Authority;
Ibrahim Ahmed Layte, Board Member representing Hirshabelle State;
Abdulkadir Aden Mohamud, Board Member representing Galmudug State;
Ibrahim Abdulkadir Mohamed, Board Member representing South West State; Ahmed Haji Abdi, Board Member representing Jubaland State;
Abdihafid Ali Dirir, Board Member representing Somaliland State; and
Mahad Mohamed Sh. Hassan, Board member representing the Federal Government.

There are nine positions on the Board of the SPA representing seven Members States and two representing the Federal Government. The Board focuses on the SPA’s long-term objectives and priorities to be one of the world’s leading petroleum authorities, promoting the development of a sustainable oil and gas industry. Specifically, the Board will ensure that the regulatory and fiscal regime being developed will apply the principles of equality, openness, accountability, transparency and non-discrimination in the interests of all the Somali people. The Board is committed to upholding the highest standards of health and safety for people in all activities relating to the exploration of petroleum in Somalia, as well as maintaining world-class environmental standards. Moreover, the Board will work to maintain sound risk management, internal control systems and reviews on the efficacy of these annually.

In June 2019, The Ministry of Petroleum and Mineral Resources announced details of the Petroleum Ownership Management and Revenue Sharing Agreement between the Federal Government and its Member States, which delivers by far the highest percentage of potential revenues from the industry to non-Federal institutions of any comparable agreement. The structure of the Board, with seven of its nine members representing the Member States, will underpin the SPA’s commitment to develop the petroleum industry in the interests of all the Somali people.

Commenting on the appointment Ibrahim Hussein, Chairman and Chief Executive, said: “We are very excited to welcome new colleagues onto the Board of the newly established SPA, as together we work to develop the country’s petroleum industry. The structure of our Board will ensure that all the Member States are able to help shape the development of the industry in the interests of the whole country. The SPA is committed to rigorous standards of corporate governance in order to achieve our goal of attracting international investment to maximize the economic recovery of the country’s oil and gas reserves. This will enable Member States to significantly increase investment in education, transport, agriculture and healthcare infrastructure.”

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Anonymous Didn’t Hack Our Website – First Bank

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Anonymous, an online network known for launching cyberattacks against government institutions, has reportedly hacked the website of First Bank of Nigeria Limited.

But the financial institution has denied the hack.

A visit to the bank’s website at 01:30pm showed that it had been brought down completely.

In a string of tweets, Anonymous confirmed bringing down the bank’s website while alleging that the bank deducted money from the accounts of customers who are in support of the #EndSARS campaign.

Anonymous also accused the bank of instructing its staff not to join the #EndSARS campaign.

It stated, “Now #ENDSARSOPPRESSION Official website of First Banks Nigeria has been taken #Offline. You remove money from users because they support #EndSARS.

“We #Anonymous have taken-down your website in support of #EndSARS

“You will pay for your actions. you should have expected us!

“Enjoy your server taken down. no money is gone.”

Anonymous, however, said it would restore the website after it “keep it down for some time”.

However, First Bank said the website was never brought down in the first place.

The bank said, “Our attention has been drawn to the tweet making the rounds on social media on shutting down the FirstBank website following a false tweet that the Bank prevented staff from joining the ongoing protests in the country.

“As the largest banking institution in Nigeria, it is not unlikely that we may be seen as a target in circumstances such as these. This is rather unfortunate as we believe far-reaching reform is necessary and we have said as much on a number of occasions across our platforms.

“In the process of change, some pain will be borne by all and some anger may well be misdirected. We understand this as a part of the process of the struggle.

“”We have a large staff strength and an even larger customer base who may be affected by any disruption and this would be a pity as a number are also contributing in many ways to ensure that voices are heard and required action is taken.

“We have been consistent in our message on the need to end all brutality and carry out necessary reforms. We will continue to lend our voice accordingly.”

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