Nairobi cuts state support to Kenya Airways

Kenya’s National Treasury has slashed its assistance to state-controlled carrier Kenya Airways (KQ, Nairobi Jomo Kenyatta) by KES10 billion shillings (USD79.8 million) from KES30 billion (USD239.5 million) to KES20 billion (USD159.6 million), according to its 2022–23 Supplementary Budget.

The move is in line with the Kenyan government’s strategy to lessen the airline’s reliance on state support by the end of December 2023, as already mentioned in the National Treasury’s draft 2023 Budget Policy Statement.

The government earlier pledged KES34.9 billion (USD283.2 million) in continued financial aid in FY2022/23 to prevent defaults for the settlement of lessors’ arrears and working capital support.

Chief Executive Officer Allan Kilavuka was not immediately available for comment.

Kenya Airways is currently undergoing restructuring – financed with state loans that will have to be repaid – focusing on fleet and network simplification, staff rationalisation, cost management, labour agreement overhauls, ancillary business and strategic partnerships.

In May 2022, the government approved a state loan of KES20 billion (USD173.9 million), and the airline borrowed another KES11.3 billion (about USD95 million) in the half-year ending June 30, 2022. This followed loans of KES11 billion (USD95.2 million) in 2020 and KES14 billion (USD121.1 million) in 2021

 

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