Kenya Airways has not been allocated a desperately needed capital Injection after government rejected a bailout proposal from the national airline, according to local media
The airline requested up to USD 500 Million earlier this year to help keep it afloat as it continues to suffer the effects of a travel depression brought about by the covid pandemic but the airline’s CEO, while grateful for continued government support, says treasury has only provided a small fraction of what’s needed
“The airline has received Ksh25 million ($227,270). We are extremely appreciative of the support we have received so far, considering the many industries government is supporting in these unprecedented times,” Kilavuka said to local publication, the East African
The publication continues to report that government has not had any discussions around a bailout for Kenya airways
“We have not received any bailout request from Kenya Airways. No. We haven’t received any. We have not discussed with KQ about this bailout for 2021/2022 with anyone,” said Stanley Kamau, the acting Director General in-charge of Public Investments and Portfolio Management Directorate at the National Treasury
In June, the carrier revealed it was also looking to government for support in debt restructuring especially as the airline was scheduled to resume repayments of its sovereign-backed debt. A moratorium was negotiated with lenders at the start of the pandemic in order to relieve the national carrier during the crisis but USD $750 Million owed will now need to be channelled through state aid for the airline to survive.
The airline reported a half year net loss of 104.36 million for 2021 down from a net loss of $130.18 million in the same period last year.
A total of 0.8 million passengers were uplifted during the first half of 2021, a 20% decline in comparison to a similar period in the previous year. And though passenger revenue declined by 17% to USD 182 Million, cargo revenues went up by 60% due to strong focus on freighter operations.
The national airline is looking to nationalization as a route to survival, however any momentum gained towards that has stalled in 2020 with the plan still on the table in parliament
Kenya Airways is 48.9 per cent owned by the government. KLM Airline still retains a 7.8 percent shareholding with 38.1 per cent going to a group of 10 local banks and the rest going to other private players