NAIROBI, Kenya, Jan 19 – The National Treasury has unveiled plans to drop its multi-billion bailouts on Kenya Airways by December 2023 and take up a financing plan that will return the national carrier to profitability.
In the Draft 2023/24 Budget Policy Statement, Treasury CS Njuguna Ndung’u said the government will develop a turnaround strategy for the cash-strapped carrier that does not involve operational assistance to support the aviation industry.
“A critical plank of this strategy will be a financing plan that does not depend on operational support from the exchequer beyond December 2023,” read the statement.
Kenya Airways has been in red since 2012, receiving multi-billion-shilling State bailouts to maintain operations.
The national carrier’s financial turbulence was exacerbated by a travel slump following the Covid-19 pandemic.
The carrier shed off some of the Covid-19 ruins in the first half of 2022, cutting its losses to Sh9.9 billion from Sh11.5 billion in the same period in 2021 on increased revenue.
Despite this, it has still remained in the red, with Treasury tabling an additional State bailout of Sh34.9 billion for the carrier in the 2022/23 supplementary budget to repay its debts.
The plan to cut government bailouts on KQ comes after President William Ruto unveiled a bid by the government to sell its entire 48.9 per cent stake in Kenya Airways to Delta Air Lines in December last year.
“I’m willing to sell the whole of Kenya Airways Plc,” Ruto told Bloomberg News on the sidelines of the US-Africa Leaders Summit in Washington DC in December. “I’m not in the business of running an airline that just has a Kenyan flag, that’s not my business.”
Delta has previously shown interest in a piece of Kenya’s air traffic.
“Discussions with Delta are at a preliminary stage,” Ruto said in the US.