Kenyan taxpayers are set to feel the full weight of owning a bigger stake of their country’s carrier , as Kenya Airways reported a $130 million full-year loss at a time when things are tough economically. The Airline is currently seeking a government bailout to sail through this Covid-19 pandemic.
Last year, Kenya Airways had a series of capital and debt restructuring that elevated taxpayers to the biggest shareholders of the financially troubled carrier . However, the national treasury in financial year 2018-2019 extended a $50 million bailout to the airline, and is currently evaluating another $70 million funding request .
Read: Why Kenya Airways flies domestic after global travel ban
Planes have been grounded for nearly three months since suspension of travel due to the COVID-19 pandemic which has severely affected the cash inflow of Kenya Airways which has to maintain aircraft, pay lease as well as salaries of employees.
Kenya Airways is 48.9 percent owned by the government and a group of 10 local banks that hold 38.1 per cent of its shares. Other shareholders include KLM Royal Dutch Airline (7.8 per cent), employees (2.4 per cent) and other shareholders 2.8 per cent.
However, the airline is set to be delisted from the Nairobi Securities Exchange (NSE), after parliament last year approved its takeover by the State. The carrier, which is struggling with a negative working capital, saw its net loss for 2019 widen to Ksh12.97 billion ($129.7 million) from Ksh7.58 billion ($75.8 million) in 2018.
The management says it has halted route network expansion and embarked on a review of the existing ones with a view to further abandoning and reducing frequencies on what it considers to be non-profitable flights .
The latest are part new measures that the troubled national carrier is considering to stay afloat in the wake of the Covid-19 pandemic that has grounded 90 per cent of its operations.