The Kenyan government is set to launch an international tender for a strategic equity partner for Kenya Airways (KQ, Nairobi Jomo Kenyatta) that would inject up to USD2 billion into the national carrier and provide operational expertise as part of the latest turnaround plan, according to Finance Minister John Mbadi.
Speaking at a news conference in Nairobi on February 11, he announced: “We shall be rolling out an international expression of interest to search for a strategic partner. The new investor is expected to inject a minimum of USD1.2 billion and up to USD2 billion into the business.”
The strategic partner must not only bring capital but also experience and best practices in running a successful airline. “We are not looking for a strategic partner who will just be bringing money,” Mbadi explained. “We want a strategic partner who will bring financial resources, but also is experienced enough, will bring expertise and best practices in the running of this airline.”
Mbadi pointed out that the government had taken over and is servicing KES63.1 billion Kenyan shillings (USD489 million) in debt from Kenya Airways, with the amount set to be converted into equity once a strategic investor is brought on board.
Kenya Airways has faced years of financial turbulence, weighed down by debt, high operating costs, and the impact of the COVID-19 pandemic. Mbadi said the latest recovery blueprint follows a business plan assessment, reviewing previous reports and studies on the airline’s operations and finances.
He said key elements of the current restructuring include rationalising the airline’s route network, fleet, and resources to align with its ambition of becoming a leading pan-African carrier. The plan also calls for renegotiating a collective bargaining agreement with workers to meet industry productivity targets, an issue that has been contentious in the past.
The restructuring is designed to be the “least disruptive option,” he said, taking place within the framework of existing financial, stock, and lease agreements.
The idea of a pan-African airline alliance with Kenya Airways as a founding partner remains on the cards. Mbadi said the objective is to have a revitalised Kenya Airways, which would be able to engage suitable airlines to form a pan-African group while continuing its strategic role as national carrier, preserving its brand, supporting the economy, and maintaining Nairobi Jomo Kenyatta as a regional hub.
