Kenya Airways plans to onboard a strategic investor by the end of this year to recapitalise the airline as part of a turnaround strategy.

The Treasury said it is working with Kenya Airways to find an investor who will inject additional capital into the airline, a perennial beneficiary of taxpayer-funded bailouts, to help it weather the financial headwinds that have left it in the red.

The disclosure followed the Public Accounts Committee’s (PAC) follow-up on the status of its recommendation that the Treasury Cabinet Secretary develop and submit to Parliament a detailed debt management and exit strategy for Kenya Airways.

The strategy was to be developed by the government within three months of the formal adoption of PAC's report.

PAC's report

The recommendation was contained in PAC's report on the accounts of the national government for the financial year ending June 2023, as adopted by the National Assembly on March 3, 2026.

“Kenya Airways (KQ) and the government as the majority shareholder, are actively seeking to raise capital through a strategic investor to help stabilise, grow its operations and as a turnaround Strategy for the Airline,” said Treasury in response to a recommendation by PAC.

“This process is currently ongoing and is targeted to be finalized by December 2026. Once a consensus is reached, the necessary approvals will be sought and an update will be submitted,” added the Treasury.

The management of KQ had indicated in June that it was seeking to raise at least $1.5 billion (Sh194.4 billion) from a strategic investor to be selected through an international tender that was to open in the coming months.

At the time, KQ said the capital-raising exercise was expected to conclude by the first quarter of 2027, with the airline betting on fresh funding to support operations weighed down by years of losses and a heavy debt burden.

The government, which holds a 48.9 percent stake in the airline, was expected to support the capital raise, offering comfort to potential investors.

Some institutions, including Parliament and the International Monetary Fund (IMF), have been critical of the government's continued financial support of KQ, flagging it as a major fiscal risk to a country that is teetering on debt distress.

The IMF has especially pushed hard for the airline to find a strategic investor to infuse stability into the Nairobi Securities Exchange-listed company and allow the government to exit. The Treasury said in February that it would offer the carrier to foreign investors in a deal valued Sh259.3 billion ($2 billion) to help turn around the airline and attach other assets to sweeten the transaction for a company operating with negative equity.

Financial needs

It is also expected to meet any pressing financial needs at the airline throughout 2026 as the search for a strategic investor continues.

The government had told the IMF that it would no longer provide direct cash injections to the airline once a new investor is secured.

KQ disclosed that the government had pledged to help it meet financial obligations that may arise during the year, signalling a continued burden on taxpayers in keeping the national carrier operational.

KQ’s equity position worsened to negative Sh132 billion last year from negative Sh118.2 billion previously as losses widened.

KQ’s liabilities exceeded its assets by a significant margin, with total liabilities standing at Sh315.2 billion against assets of Sh183.2 billion. This means shareholders would recover nothing if the airline were liquidated.

→ dakure@ke.nationmedia.com

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