Kenya Airways touched down in the news again this week, and not for a new route. The Kenyan government has handed the national carrier a $350 million shareholder loan to help it meet urgent financial obligations as it works through a turnaround plan. President William Ruto's office confirmed the move, adding that the funds will be released in tranches under the finance ministry's watch, with repayment stretched over up to 10 years. There is also an option to convert the financing into equity, pending the necessary approvals.
The government did not stop there. Kenya's cabinet also endorsed a proposal to convert an existing Sh122 billion ($940 million) in government loans, along with accrued interest, into an equity-qualifying tradable instrument. It is a significant restructuring move for an airline that has been burning through cash for years.
The timing is sobering. KQ briefly looked like it had turned a corner in 2024, posting its first profit in over a decade. But that momentum did not last. In the first half of this year, the airline recorded a pre-tax loss of Sh15.92 billion ($122.74 million), up from Sh12.17 billion ($93.82 million) in the same period last year. A spike in fuel prices linked to the Middle East crisis took a heavy toll.
The numbers behind the airline paint a stark picture. Total borrowings stood at Sh151.3 billion ($116.64 million) at the close of 2025, while cash reserves sat at just Sh5.3 billion ($40.86 million). The government, which holds a 48.9% stake in the airline, effectively owns around 90% of KQ's debt.
Board chairman Kiprono Kittony says the airline has received interest from local and international investors, but no firm agreements have been signed. Until a strategic partner steps forward or KQ finds a way to fly profitably on its own, Nairobi's wallet stays open.
Originally published by African Business.