Kenya Airways Embraer 190-100 The Kenyan government is committed to supporting its national carrier in its turnaround strategy and forthcoming nationalisation, which includes giving it state financial support, acting National Treasury Cabinet Secretary Ukur Kanacho Yatani has clarified.
“ Kenya Airways is critical to the country and to the national brand, and the government cannot afford to lose it,” Yatani pledged on January 10 at the launch of the Kenya Tourism Sector Performance Report for 2019, The Standard newspaper said. “We have a plan, and the Treasury is currently looking for resources for KQ to ensure it does not collapse.”
“Very soon we are going to have it done. As the Treasury, we are working on looking for resources to inject […] so that they can continue to remain float,” the cabinet secretary promised to the travel and tourism representatives.
As plans continue to nationalise Kenya Airways, the airline has been pushing for a capital injection to help it stabilise its operations, which are being held back by high debt and a first-half loss for 2019 of KES8.56 billion shillings (USD84 million). The carrier needs up to KES45 billion (USD443 million) to get operations back to profitability, chairman Michael Joseph has said, according to The Star newspaper.
“The turbulence it has been going through in the last few years, particularly last year, has had a direct consequence on tourism and the general economy,” Yatani said. “We will not allow it to go.”
Jambojet CEO Allan Kilavuka has been steering Kenya Airways in an acting capacity since January 1, replacing Polish national Sebastian Mikosz who opted out before the expiry of his contract. Kilavuka will lead both airlines “until a substantive CEO for Kenya Airways has been recruited and appointed,” the flag carrier said.
Through nationalisation, Kenya Airways is hoping to emulate the successful model used by its rival, state-owned Ethiopian Airlines , and return to growth, Reuters reported.
Since announcing the nationalisation plan in 2019, the Treasury has said it plans to buy out Air France-KLM , local banks, and more than 80,000 individual shareholders as it delists the carrier from the Nairobi Securities Exchange.
Transport Principal Secretary Esther Koimett told the country’s parliament in November that the Ministry of Transport was working with the International Finance Corporation (IFC) to hire a technical expert to conduct a fresh valuation and purchase price. Kenya Airways is 48.9% owned by the government, while banks control 38.1% and Air […]