Kenya Airways/KLM Alliance

In December 1995 the Kenyan government accepted in principle KLM Royal Dutch Airlines' bid to purchase 26% of the shares in Kenya Airways.  The alliance with Kenya Airways allowed KLM to add an African presence to its wide ranging network of alliances. The shares were purchased for US $26 million cash.  KLM also agreed to provide Kenya Airways with US $3 million worth of technical and service facilities.

At the time of KLM's investment in Kenya Airways, KLM also entered into a shareholder's agreement with the Kenyan government.  This agreement contains provisions to protect the level of KLM's interest in Kenya Airways at 26% of the issued share capital.  KLM also agreed not to dispose of any of its shares in Kenya Airways for at least five years.  The shareholders agreement contains certain other important provisions:

Kenya Airways and KLM also entered into a comprehensive Cooperation Agreement with a Mission Statement: "we connect the world".  The Cooperation Agreement sets out the two airlines' plans for the future and the means by which they intend to work together to develop a world-wide network with Nairobi as one of its hubs.  The aim is to provide a seamless service to customers throughout the network.

The guiding principles of the Cooperation Agreement are designed to ensure that both airlines benefit from the Agreement: the "win-win" principle.  The key objectives of the Cooperation Agreement may be summarized as:

An Alliance Committee was formed to ensure that the objectives of the Cooperation Agreement are achieved in a timely manner.

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