Kenya’s newly elected President William Ruto has told Bloomberg that the government is prepared to sell its entire stake in Kenya Airways (KQ) to interested parties.
During the interview, which took place on the sidelines of the US-Africa Leaders’ Summit in Washington DC, Ruto revealed that the government was interested in selling the “whole” of the airline.
“I’m not in the business of running an airline that just has a Kenyan flag, that’s not my business,” Ruto said.
The Kenyan government is keen to establish partnerships with other airlines that can help make KQ profitable, after last turning a profit in 2012.
In the interview, Ruto said that the Kenyan government is “looking for partnerships that will make Kenya Airways a profitable entity whatever that means, in whatever configuration, [and in] whatever form it takes.”
Ruto also revealed that Delta Air Lines was one of the potential airlines the government was interested in partnering with, stating that discussions with the airline were at a “preliminary stage”. However, Ruto did not disclose details of the discussions with Delta.
The sale of the Kenyan government’s stake in KQ would effectively alleviate it from bailing out the carrier. In October 2022, Kenya Airways defaulted on its repayment obligation of an $841.6 million loan from the US Export-Import Bank in 2017, which the airline used to purchase seven aircraft and one engine. As a result, the Kenyan government was obliged to take over the repayment and pay up to $525 million.
The Kenyan government owns a 48.9% stake in Kenya Airways while Air France-KLM SA holds 7.8%. A group of 10 local banks, control a 38.1% stake in the airline, while employees hold a 2.4% stake and other shareholders hold a 2.8% stake.
(AEROTIME report)