Kenya Air seeks $500m to ride out virus

Bloomberg

Kenya Airways Plc needs at least $500 million to ride out the coronavirus crisis after
first-half revenue plunged almost 50%, Chief Executive Officer Allan Kilavuka said in an interview.
The carrier, which is 49% state owned, must also be fully nationalised alongside Kenya Airports Authority, which runs the Nairobi hub, under a holding structure similar to that of regional leader Ethiopian Airlines Group, he said.
“If we don’t restructure the airline, and take the airline as is into this organisation, then we are doing a disservice to the
taxpayer,” Kilavuka said. “Right now it is under-capitalised, given the effects of Covid.”
Kenya Airways hasn’t given up on its ambitions of one day rivaling Ethiopian, according to the CEO, though it will be a long stretch to match up with Africa’s largest and most consistently profitable airline. In the meantime, the company is focussed on cutting labour and plane-lease costs, its biggest fixed expenses, by $66 million through the end of 2021.
Projections indicate that Kenya Airways will need only 24 aircraft over the next two or three years, out of a current fleet of 34 passenger planes and two freighters, Kilavuka said. Talks are underway with six leasing firms on swapping fixed rentals for utilisation-based terms, while other proposals include converting unneeded airliners for short-term cargo use.