Struggling Kenya Airways (KQ) has now requested Sh7 billion emergency funding from the government, Treasury CS Ukur Yatani has confirmed. The Airline has also asked for tax breaks and navigation and landing fees waivers.
The Kenyan National Airline has cited a tough business environment due to the Covid -19 coupled with no revenue generation as the reasons behind its woes.
In the request, KQ said it intends to use the funds to maintain grounded planes, payment of staff salaries and settlement of utility bills like security, water, electricity and parking fees.
Earlier this year, the Kenyan government had to inject Sh5 billion in loans into the airline in order to complete the scheduled engine overhaul program on its E190 Embraer fleet.
The Treasury is reviewing the application but has remained non-committal on whether it will offer the national carrier the money it needs.
In 2017, the airline owed the some Sh16.8 billion worth of loans which the government converted into shares as part of the airline’s debt restructuring. The government, which owns 48.9pc of KQ shares, also currently holds another Sh7.7 billion worth of convertible debt.
Even before Covid-19 struck, KQ reported a net loss of Sh8.5 billion in the half year ended June 2019, more than double the net loss of Sh4 billion the year before. Now with grounded planes and almost no revenue, the airline might never recover.
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