Kenya Airways is for sale. The Kenyan government is intent on selling its controlling stake in the national airline Kenya Airways, to US carrier Delta Air Lines.
Kenyan president William Ruto this past week met with Delta Air Lines executive vice president for external affairs Peter Carter to discuss details of an acquisition, reports Bloomberg.
This was during the Kenyan president’s recent visit to Washington for the US-Africa Summit.
According to the President, details of the “discussions are at a preliminary stage,” but Nairobi hopes a deal with Delta Air Lines will turn the national flag carrier into a profitable venture having last attained profit in 2012.
“I’m willing to sell the whole” of Kenya Airways Plc, Ruto said in an interview on the sidelines of the US-Africa Leaders Summit in Washington DC last Friday.
“If you have someone who wants to buy the whole airline, please, I’d like to have a conversation with them,” president Ruto said.
Also present at the presidential-level discussions was Kenya’s Trade Cabinet Secretary Moses Kuria, and Kenya Airways CEO Allan Kilavuka.
“I’m not in the business of running an airline that just has a Kenyan flag, that’s not my business. The government is looking for partnerships that will make Kenya Airways a profitable entity whatever that means, in whatever configuration, whatever form it takes,” President Ruto said.
We are dedicated to working on a restructuring plan that will make Kenya Airways exploit its full potential and turn it into a profitable venture. pic.twitter.com/yqVcpEi1EM
— William Samoei Ruto, PhD (@WilliamsRuto) December 15, 2022
The Nairobi-based carrier is 48.9% owned by the government, Air France-KLM SA holds a 7.76% stake, and a group of lenders who swapped their debt for equity in the company control 38.09%.
Delta’s investments in foreign airlines
Airlines like Delta with global networks depend on partnerships with foreign airlines to extend their reach beyond international hub cities.
Prior to the pandemic, Delta was achieving record international growth attributed to a combination of organic growth and its global partner network.
Last year in December, the US carrier touted the value of re-upping its international partnerships as global travel ramps back up.
The Atlanta-based airline invested a combined $1.2 billion in its partners airlines including Virgin Atlantic, Aeromexico and LATAM as they emerged from bankruptcy restructurings.
During that time, Delta Air Lines said its investment would maintain its 49% equity stake in U.K.-based Virgin Atlantic and that it aims to have a 20% stake in Mexico’s Aeromexico and 10% in Chile-based LATAM.
The carrier had spent $360 million for its 49% stake in Virgin Atlantic in 2012. It had owned about half of Aeromexico and took a $770 million charge on the investment after Aeromexico’s bankruptcy filing. It previously had a 20% stake in LATAM that it acquired for $1.9 billion in 2019.
“The work each of our partners has done to strengthen their businesses for the future makes these partnerships even more valuable,” Delta CEO Ed Bastian said in a statement.
Delta was also among a consortium that placed a bid in May for the acquisition of ITA Airways, the successor company to bankrupt Alitalia.