PREVIEW
Nairobi is racing to find buyers to bail out the state airline, formerly the pride of the region
President William Ruto made little secret of the object of his affections ahead of the 13-16 December African leaders' summit hosted by United States President Joe Biden; US carrier Delta Airways, which he hopes will be persuaded to purchase a significant chunk of the loss-making Kenya Airways.
On the sidelines of the summit's third day, dedicated to trade and US investment in Africa, Ruto's officials held discussions with the carrier's Executive Vice-President for External Affairs Peter Carter 'on building partnerships to make both airlines competitive and attractive.'
Kenya's Transport Minister Kipchumba Murkomen made clear that the government is looking to end its financial support for the airline and perhaps sell its entire 48.9% stake.
'We are doing everything possible to ensure that we no longer subsidise the airline and that is why we are looking for a strategic partner,' said Murkomen.
Attempting to drum up foreign investment has not borne fruit in the past. Air France-KLM owns 7.76% of Kenya Airways but has long been reluctant to pump in significant amounts of investment.
Kenya Airways made a net loss of $82.4 million in the six months of 2022 and has been repeatedly bailed out at various points over the past decade (Dispatches 14/11/22, Cutting public spending and reforming state companies, Ruto keeps $2.34bn IMF deal on track). However, the Ruto government needs to raise money to reduce its budget deficit and ensure that it receives money from the $2.34bn International Monetary Fund programme agreed earlier this year. The government has promised the IMF that Kenya Airways will be restructured, and that it will sell shares in up to ten state-owned companies (AC Vol 63 No 20, Kenyatta era debts haunt Ruto's growth plan).
Copyright © Africa Confidential 2024
https://www.africa-confidential.com
Prepared for Free Article on 21/12/2024 at 16:11. Authorized users may download, save, and print articles for their own use, but may not further disseminate these articles in their electronic form without express written permission from Africa Confidential / Asempa Limited. Contact subscriptions@africa-confidential.com.