Kenya Airways (KQ) has announced plans to increase its fleet by 30-40% and grow its destinations by twelve in the next five years.
This is after the National Carrier recorded a net profit increase of Kes513 million for the six months ending June 30, 2024, compared to Kes21.7 billion recorded in a similar period in 2023.
The airline attributed the growth to reduced exposures to foreign currency fluctuations, state loan restructuring, and improved cargo and passenger businesses.
KQ Chief Executive Officer (CEO) Allan Kilavuka says the airline is facing challenges with fleet acquisition due to manufacturing delays caused by a backlog from Airbus and Boeing.
He revealed that the positive earnings had reaffirmed the Airline’s strategy to return the airline to profitability despite its current debt.
Did you read this?
Kilavuka stated that for the airline to remain profitable, it will require a capital injection that will enable it to repay the Kes 120 billion it owes.
He disputed claims of government bail-out, noting that the funds extended to Kenya Airways by the National Treasury are considered debt that the airline will repay.
“If we can bring in equity close to that number that is negative equity then we will rebalance the debt to equity close to one to one…a lot of the debt that we are talking about is debt to shareholder loan so these amounts that you keep hearing about that government has bailed out KQ is loans to Kenya Airways with the belief that Kenya Airways will pay it back.”
The airline hopes a strategic investor will inject this capital in return for a 49 percent stake after valuation, which is set to commence in the coming days.
Kilavuka said the equity cap of 49 percent ensures the airline remains a Kenyan company.
