The Kenyan government is moving forward with its plans to halt support for Nairobi-based Kenya Airways (KQ) by the end of 2023, having now trimmed KQ’s bailout package.
The Kenyan National Treasury has cut Sh10 billion ($80 million) from the package, a 33% reduction from the original figure, according to a Business Daily report.
The Kenyan government initially approved a Sh34.9 billion ($278 million) bailout package in December 2022 in a bid to help the airline repay its arrears to lessors.
Kenya’s government is the majority shareholder in KQ, with a 48.9% stake. KQ has received a total of Sh98.2 billion ($784 million) in bailout loans from the Kenyan government.
However, the East African state is keen to turn KQ’s misfortunes around, with the flag carrier having last turned a profit in 2012.
Kenyan government keen to sell controlling stake in KQ to investors
In mid-December 2022, the Kenyan government announced its intentions to pair the Kenyan flag carrier with a strategic investor, which would involve selling its entire stake in KQ (48.9%) to interested parties.
In an interview with Bloomberg, Kenya’s newly elected President William Ruto revealed that Kenya was actively exploring options and potential partnerships to make KQ a “profitable entity”.
Delta Air Lines was among the potential airline partners with which the government was interested in partnering, stating that discussions with the airline were at a ‘preliminary stage’.
