Africa-Press – Kenya. The government has opened a fresh search for an investor to pump $2 billion (Sh258 billion) into Kenya Airways’ turnaround strategy.
The latest planned restructuring follows recommendations from what the National Treasury Cabinet Secretary John Mbadi said is a turnaround strategy that marks the most consequential shift in the airline’s trajectory in decades.
This signals the state’s readiness to make sweeping operational and financial changes to end KQ’s dependence on taxpayers.
For KQ’s turn around, the global search for a strategic investor, is expected to inject between $1.2 billion (Sh154.8 billion) and $2 billion (Sh258 billion) into the struggling carrier.
The plan focuses on rationalising KQ’s network, fleet and staffing to align the airline with its ambition of becoming a competitive African carrier capable of running sustainably.
“The main highlights of the strategy include the preparation and accumulation of comprehensive financial and capital structure that includes new strategic investors to position the company for success,” said Mbadi.
“The new investor is expected to inject a minimum of 1.2 billion US dollars and up to 2 billion US dollars into the business.”
According to Mbadi, a major pillar of the plan is the renegotiation of the airline’s collective bargaining agreements, which the Treasury says must reflect industry productivity standards if the recovery is to take root.
“Remember, we have the contentious CBA process too, which needs to be negotiated,” added the cabinet secretary.
At the same time, the government is preparing a comprehensive capital restructuring that will see a new investor join the airline under fresh commercial terms.
The state has already taken over Sh63.1 billion of the carrier’s debt, which it is currently servicing.
Mbadi confirmed that this amount will be converted into equity once a strategic partner is secured, giving the investor a cleaner balance sheet to work with.
Push for a new investor comes at a time that State bailout of struggling corporations declined by 16.9 per cent to Sh83.24 billion last year as the government stepped back from shoring up indebted entities.
The Draft Medium-Term Debt Management Strategy for 2026-2027 to 2028-2029, shows that that treasury, has been backing down on guarantees for Kenya Ports Authority (KPA), Kenya Electricity Generation Company (KenGen) and Kenya Airways (KQ)
National Treasury says it intends to issue an international expression of interest shortly, making clear that the ideal partner must bring more than capital.
Mbadi said Kenya is seeking an aviation player with the capability to introduce global best practices and operational discipline, stating that “this is not about a partner who merely injects money, but one who can run a successful airline.”
Despite the scale of the shake-up, the government insists that Kenya Airways will retain its national carrier status, preserve the JKIA hub advantage and maintain the integrity of the KQ brand.
The objective, according to Mbadi, is to create a revitalised airline capable of forming commercially meaningful partnerships across Africa and delivering long-term economic value.
Already the national carriers share price had in January rallied 69.7 per cent in eight trading days amid reports of ongoing talks with a strategic investor.
KQ has in recent days been the subject of fierce competition between Temasek Holdings, state investors from Singapore and Qatar Airways, an airline that is owned by the Qatar Government.
The two state-owned agencies have been seeking to secure a deal with Kenya’s national carrier.
