International Finance

Kenya Airways needs Sh45 bn to be profitable: Chairman

Kenya Airways
According to chairman Micheal Joseph, it needs to get rid of its debt before making profits again

Kenya Airways would need an investment of around Sh45 billion to make it a profitable business again, according to its Chairman Micheal Joseph. He pointed out that the carrier needs to get rid of its debt before starting to think about making profits again.

He believes a cash injection would help Kenya Airways deviate from the nationalisation process and provide enough resources to help the carrier grow and improve its operations.

Micheal Joseph told the local media, “The plan was to originally get Sh10 billion capital injection but that didn’t happen. This is the legacy that we inherited and now we have to grow from there.”

He also pointed out that Nairobi may soon lose its status of being the gateway to East Africa to Kigali if the state fails to act.

Outgoing CEO of Kenya Airways, Sebastian Mikosz also expressed his frustrations with the government’s response to the crisis faced by the carrier. He believes too much political interference and lack of knowledge about the industry have harmed the carrier and its operations.

While the Kenyan government owns a 48 percent stake in Kenya Airways, 38.1 percent is owned by the KQ Lenders Company, 7.8 percent by KLM and the rest of the shares are owned by individual investors. The carrier’s shares are traded on the Nairobi Stock Exchange, the Dar Es Salaam Stock Exchange, and the Uganda securities exchange.

Earlier this year, Kenya Airways reported an Sh8.6 billion net loss during the first half of 2019. The loss is heavily attributed to the 15.6 percent rise in the carrier’s total operating cost. In September, it was reported that the carrier is planning to sell seven of its aircraft to deal with increasing losses.

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