Cash-Strapped Kenya Airways Seeks 54.87 Billion Shillings Bailout from Gov’t
Kenya Airways (KQ) is seeking a $500 million (Sh54.87 billion) bailout from the government to stay afloat in the next nine months.
KQ CEO Allan Kilavuka says the funds will be used on the airline’s operations such as salaries, maintenance of planes, and payment of security and utility bills.
Kilavuka warned that the national carrier could become bankrupt in the near future if the government does not come to its aid.
Creditors have been reluctant to lend to African airlines as they struggle with reduced earnings following a collapse in air travel demand due to CIVID-19 disruptions.
“KQ requires a bailout as is the case with all airlines in the world. At the very minimum, what we need for 2021 is $500 million,” Kilavuka said in an interview.
“We need the money because we have a lot of obligations to fulfill. Our operations are at 50 percent and this cannot cover the cost we incurring today.”
This week, KQ announced a loss of Sh36.2 billion, the largest by a corporate in the country’s history.
The loss in the year ended December 31st, 2020, which is nearly threefold the Sh13 billion loss recorded a year earlier, was largely attributed to the collapse of the airline’s operations in 2020 due to the COVID-19 pandemic-related disruptions.
Its cumulative revenues in the year under review dropped by 59 percent to Sh52.8 billion from Sh128.3 billion in 2019 while passenger income declined by Sh69.9 billion following the grounding of flights for five months in 2020.
During the period, the airline ferried 1.8 million passengers compared to 5.2 million in the previous year.
Comments (8)
Why Bailout to pay salaries, lay the employees off like other industries. If the planes are grounded where is the maintenance cost coming from?
Exactly. Why pay for Airline’s operations such as Salaries, Maintenance of Planes, and Payment of Security and Utility Bills for an Entity that's NOT Producing? Because Kenya loves Corruption, Busy bodies, and Handouts that come with it. And since when did a LUHYA resuscitate a Dying business (except 1 and Only MOODY Awori)?
Let it die of corruption then start afresh with one plane at a time. No reason why Ethiopia air and others are flourishing. Difference is love of corruption
Kenya Airways is not needed anymore. Education is online. Tourism will soon be online. Times are changing for ever.
People will soon stay in their homeland.
Kenya Airways should be grounded until further notice !!
My nyama choma business has failed. Nauliza serikali inisaidie so that I don't go under. After all I have bills to pay just like KQ.
Let this guzzler of taxpayers sweat DIE! How many times are Kenyans going to sink their money in this pathetic airline? Insanity is repeating that same thing over and over and praying for different results. Stop this insanity.
Time has come for Crocodile to tell other billionaire Kenyans why they should pump billions to KQ,his only way home.Nothing will succeed in Kenya with demons like Uhuru,Raila,Rutu,Nyong,Mumbi running the country.Kazi kwako Samuel Muchiri.
Shut down this airline for good!