Kenya Airways Investor Hunt Stalls on Shareholder Delay
Kenya Airways (KQ) has not yet secured a strategic investor, despite a pledge made last year to do so by December, with delays in government approval blamed for stalling the formal search process.
The airline’s chief executive Allan Kilavuka confirmed that while informal discussions are ongoing with potential investors, no binding engagements can be made until the formal process receives clearance from the government.
“We were hoping that we would have identified an investor by December last year. Unfortunately, we have not yet identified one because the formal process has not been approved by the principal shareholder,” Kilavuka said. “So there is a significant delay, but we hope to make more progress going forward.”
Kenya Airways is looking for a strategic partner to support its recovery and growth, including fleet expansion and debt reduction.
The delay in the investor search is denying the airline critical liquidity at a time when it is aiming to build on recent financial gains.
After years of losses, the carrier returned to profitability in 2024, posting a pretax profit of Ksh5.53 billion.
It had earlier reported an operating profit of Ksh10.5 billion in 2023 and a net profit of Ksh513 million in the first half of 2024, its first profitable half-year since 2013.
The turnaround has been attributed to improved cost control, rising passenger numbers, and foreign exchange gains.
However, the airline remains technically insolvent, with liabilities still outweighing assets, making the need for a capital injection urgent.
The government of Kenya, through the National Treasury, is the airline’s largest shareholder with a 48.9 percent stake, following a debt-for-equity restructuring programme.
Other key stakeholders include a consortium of lenders and Dutch carrier KLM.
Kenya Airways has launched Project Kifaru, a strategic transformation plan aimed at long-term sustainability. However , without a committed investor, analysts say its recovery could stall before full stability is achieved.
gandae@businessdayafrica.org