Treasury Rejects KQ’s KSh 7 Billion Bailout Request

Cash-Strapped Kenya Airways has been hit by another shocker after the national treasury rejected its 7 billion shillings bailout request it made following the grounding of passenger planes due to the Covid-19 pandemic.

In its request, KQ said that it was in dire need of cash amounting to 7 billion shillings which it would use to maintain its planes as well as pay salaries to its staff and sort out utility bills. The airline also said that it was on the verge of collapsing if the bailout request does not go through.

However, according to National Treasury Cabinet Secretary Ukur Yatani, KQ woes go beyond Coronavirus-related issues arguing that the national carrier needs restructuring instead.

“We are not making any 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 is for the opinion that KQ needs to be nationalized with a restructuring plan supported by the National Treasury and the ministry of Transport underway and would be unveiled soon.

Currently, KQ is surviving on cargo business which does not pay much since it faces stiff competition from Ethiopian Airlines. Prior to the Covid-19 pandemic, KQ was majorly surviving on Passenger planes but still it was not giving out returns as expected.

Transport CS Macharia admitted that KQ had only two cargo freights which were designed for shorter distances thus prompting the Airline to convert some of its passenger planes to cargo planes.

Another challenge the Airline is facing is the payment of parking fees at the JKIA. For a large plane to be parked at JKIA, an Airline has to pay 2,650 shillings per day while the landing fees are charged at 62,010 shillings and 74,412 shillings for the daytime and night respectively.

“We can survive if we get some revenue from cargo, but only just survive. For us to meet our full obligations, we need government support urgently,” KQ CEO Allan Kilavuka earlier said.