The Kenyan government is in the process of hiring a consultant to advise it on whether the State should increase, retain or reduce its shareholding in Kenya Airways.

This comes after opinions from different quarters suggest the government should buy out or further dilute the stake held in Kenya Airways by Netherlands airline KLM to reduce the possibility of a conflict of interest.

Transport Principal Secretary (Assistant Minister) Irungu Nyakera says the government is not keen on taking over Kenya Airways but prefers to allow some unspecified shareholding by the private sector for accountability purposes.

In the six months ended September 2016, the airline’s loss narrowed 60 per cent to 4.8 billion shillings (about 47.6 million US dollars) from 12 billion shillings in the previous quarter. This was mainly supported by a 3.3 per cent increase in its load factor with passenger numbers hitting 2.2 million.

In addition, direct operating costs were reduced by 2.0 billion shillings to 32.8 billion shillings, mainly driven by lower fuel prices.

The government, which is the majority shareholder in Kenya Airways, expects an even better performance going forward, backed by the recovery strategy put in place at the airline over the last two years.

The board, led by Chairman Michael Joseph, who took on the position last October, is currently in the process of recruiting a new chief executive officer for the national flag carrier to take over from Mbuvi Ngunze from April this year.

Pressure has also been mounting on the government to increase its stake in Kenya Airways with some suggesting that the state buy out the other shareholders, including KLM.

The government directly has a 29.8 per cent stake in Kenya Airways followed by KLM at 26.73 per cent while the rest is held by private investors.

On Wednesday, Joseph updated President Uhuru Kenyatta on the restructuring process underway as well as the turnaround strategy.