Kenya Airways applies for emergency State aid

A Kenya Airways Boeing 787-8 at London Heathrow Airport. Photo by Karam Sodhi | AeroNewsX

Kenya Airways (IATA: KQ), flag carrier of the Republic of Kenya, has once again made a plea for government support to weather out the storm brought about by the COVID-19 pandemic. According to Kenyan newspaper Business Daily, the carrier has requested a Kshs. 7 billion (approx. US$ 65 million) emergency bailout meant to maintain grounded planes, pay staff salaries, and settle utility bills. The Kenyan Treasury is reportedly reviewing the application but remains non-committal on whether to provide the financial stimulus the airline seeks.

This follows the temporary suspension of the carrier's international passenger flights, which first came into effect with some routes in January, and a complete halt on the 25th of March. A similar suspension on domestic services followed thereafter due to a government-imposed movement restriction. The airline's Chief Executive Officer stated that between January and April 2020, the entity had lost about US$78 million in revenue, in large part owing to the current crisis. This therefore necessitated a shift in reliance to cargo operations for revenue generation for the duration of the global health crisis.

This latest request comes hot in the heels of a Kshs. 5 billion loan the carrier received from the government in February this year, with Treasury Cabinet Secretary Ukur Yatani noting that “The request will be reviewed against the background that the airline recently received Sh5 billion from the government.” Furthermore, the Treasury indicated that it had not included Kenya Airways in the upcoming budget estimates for the year beginning July. This could be an indication of yet another government fatigued by requests from underperforming flag carriers, as has recently happened with South African Airlines where the government denied an application for state aid, leading the way to the carrier's provisional liquidation.