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KQ Seeks Additional Ksh 4 Billion Loan After Ksh 12.4 Billion Loss

BY Soko Directory Team · May 28, 2020 11:05 am

The Kenya Airways is eagerly waiting for the Government to bail it out with an additional loan of four billion shillings days after its seven billion shillings bailout request flopped.

The Cash-strapped national carrier has been up and down seeking help from the Government to come to its rescue before it collapses due to its financial crisis that has been worsened by the Covid-19 pandemic.

KQ said it sent a request to the national treasury in January 2020 seeking nine billion shillings in loans to keep it afloat but the Treasury only disbursed five billion shillings to the airline thus it still fell short of four billion shillings.

The airline said it received five billion on February 18 which was used to maintain its flights and for other general operations.

KQ Chairman Michael Joseph said the Group expects the next batch of four billion from June 1 that it will use to cater for fleet costs, staff salaries and payment of utility bills.

“We’ve been grounded for almost three months now. During that time, we’ve maintained all of our 38 aircraft. We have to pay leases and meet insurance costs which do not go away whether you fly or not,” he said.

“We have asked formally for support from the government and are still waiting to hear from them.”

Earlier, KQ had made a different request to the national Treasury seeking seven billion shillings in loans to cushion it against the adverse effects of Covid-19 but the Treasury CS UKur Yattani snubbed the request.

Treasury CS Yattani argued that KQ woes went beyond the Covid-19 crisis adding that plans to nationalize and restructure the airlines are underway.

“We are not making commitments at this stage. Kenya Airways need to remain afloat but it is also important to look at structural challenges because what is happening now is more than the business environment,” CS Yattani said.

KQ is only left to survive on revenue from cargo flights after all the passenger flights were grounded at the Jomo Kenyatta International Airport during the Covid-19 pandemic.

KQ CEO the revenue is too little to keep it at bay, and for the airlines to meet its full obligations, it needs support from the Government.

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