The government will inject fresh capital to the tune of Ksh 45.2 billion into Kenya Airways as part of efforts to turn around the flag carrier.
The new shareholder financing is expected to help the airline meet urgent financial obligations including aircraft maintenance which will help return grounded aircrafts back to service.
The approval made on Friday during a Cabinet meeting chaired by President William Ruto will allow the National Treasury to disburse the funds in trances with a repayment period of up to 10 years and the possibility of conversion into equity, subject to the necessary approvals.
In a year to December 2025, the airline posted net loss of Ksh 17.2 billion which it blamed on harsh economic environment experienced during the period.
According to the airline, persistent global supply-chain constraints coupled with shortages of critical spare parts affected aircraft availability and operational reliability leading to some aircrafts being grounded.
Additionally, the Cabinet also endorsed the proposed conversion of Ksh 122 billion in existing Government loans, plus accrued interest, into an equity qualifying tradable instrument to strengthen the airline’s balance sheet and support future capital raising.
“The measures form part of Kenya Airways’ long-term turnaround plan and are intended to safeguard an airline that contributes more than $1.3 billion annually to Kenya’s GDP through tourism, trade and regional connectivity. Implementation remains subject to the necessary corporate, shareholder and regulatory approvals,” read the dispatch.
The flag carrier has already returned to operation two aircrafts, a Boeing 787-8 and Boeing 777-300 ER which are further expected to help the airline improve fleet capacity.
Latest disclosure by Kenya Airways indicate that in six months of the year to June 2025, revenue rose to Ksh 81 billion despite prevailing higher fuel environment with fuel now accounting for 32% of total operating expenses and 52% of direct operating costs
“We grew revenue by 9% to Ksh 81 billion despite operating with 9% less capacity. The improvement in our cabin factor and the strength of average coupon values demonstrate that demand for our network remains resilient,” said Dr. George Kamal, Ag. Group Managing Director and Chief Executive Officer.
The airline projects the return to service of grounded aircrafts to further enhance its capacity, strengthen its network and improve operational flexibility
The restoration of aircraft capacity is expected to strengthen network resilience, improve operational
flexibility and enable the airline capture additional demand as market conditions improve.
