Kenya Airways: State injects 91 million USD to support loss-making company
Funding strangled by the health crisis, Kenya Airways has recently benefited from ad hoc government support. His bailout, announced last year, is still awaited. The company needs at least $ 500 million to stay afloat.
The Kenyan state has granted 10 billion shillings ($ 91.4 million) to Kenya Airways (KQ). According to Business Daily, this is what emerges from a 2021 budget extension plan tabled in parliament on Tuesday, February 9. According to the Kenyan business daily, the parastatal company received 8 billion shillings from the Treasury, and 2 billion shillings from the Ministry of Transport.
This to alleviate its financial difficulties due to the Covid-19 pandemic. In May 2020, however, the government refused to bail out the loss-making carrier, which claimed 7 billion shillings ($ 64 million) from KQ. At the time, the Secretary of the Treasury said that the business rather needs a long-term solution. Ukur Yattani Kanacho added that a restructuring plan backed by his administration and the Ministry of Transport was ready, and due to be unveiled in the coming weeks.
To date, said plan has still not been published. On the Kenya Airways side, this money was claimed to pay for the maintenance of its fleet, certain public services (water, electricity, etc.) and staff salaries. Speaking of wages, the company informed its employees last January that it was considering a further reduction in their earnings (from 5 to 30 percent) for workers whose monthly wages exceed 45,000 shillings ($ 409). As a reminder, Kenya Airways, whose nationalization process is stalling, had already reduced the salaries of its agents in March 2020, after the temporary suspension of its operations. In September 2020, Allan Kilavuka, CEO of KQ, said his company needs at least $ 500 million to overcome the health crisis.
