The Cabinet, chaired by President William Ruto on Friday, gave the go-ahead for a fresh capital injection of KSh45.2 billion into Kenya Airways.
The Treasury will release the money in tranches, with a repayment window of up to ten years and an option to convert the funding into equity, subject to required approvals.
In the same meeting, ministers endorsed the conversion of KSh122 billion of existing government loans, together with accrued interest, into an equity-qualifying tradable instrument to reinforce the airline’s balance sheet and aid future capital raising.
Kenya Airways recorded a net loss of KSh17.2 billion for the year ending December 2025, blaming a harsh economic environment, global supply-chain constraints and shortages of critical spare parts that forced several aircraft to remain grounded.
The new financing is intended to meet urgent obligations such as aircraft maintenance and to bring grounded planes back into service; the carrier has already returned a Boeing 787-8 and a Boeing 777-300ER to operation.
Revenue rose 9 per cent to KSh81 billion in the six months to June 2025 despite a higher fuel environment, with fuel now representing 32 per cent of total operating expenses and 52 per cent of direct operating costs. Dr George Kamal, Ag Group Managing Director and Chief Executive Officer, said the revenue growth demonstrated resilient demand for the network.
The airline projects that restoring the grounded aircraft will boost fleet capacity, strengthen network resilience and improve operational flexibility, allowing it to capture additional demand as market conditions improve.
The dispatch noted that the measures form part of Kenya Airways’ long-term turnaround plan and aim to safeguard an airline that contributes more than $1.3 billion annually to Kenya’s GDP, with implementation pending corporate, shareholder and regulatory approvals.
