Blow For Kenya's National Carrier As Bailout Turned Down

The aviation sector worldwide was the worst hit by the Covid-19 pandemic in 2020 and Kenya has been no different. Its ailing national airline and the tourism sector have seen the number of international arrivals fall by 71.5% - to 579,600 passengers.

Now Kenya's National Treasury has rejected a proposal by cash-strapped Kenya Airways (KQ) for a fresh financial bailout estimated at U.S.$499.77 million, spelling doom to the operations of the loss-making national carrier. This will almost certainly have an impact on the tourism sector as well.

This also plays out against a backdrop of a 2019 plan by Kenya Airports Authority (KAA) to grant Kenya Airways permission to manage operations at Jomo Kenyatta Airport for 30 years - a plan that was supposed to see the merger with the state-owned KAA turn around its ailing business and turn Kenya into a regional transport hub.

The Covid-19 pandemic has also seen an increase in job losses with pilots in 2020 approaching President Uhuru Kenyatta to help save their jobs.

In an August 2021 report, Kenya Airways was still in the red despite cutting its half-year losses by 20% - which was due to the increased revenues from cargo and charter flight operations. This was despite the ongoing cash conservation measures, including partial deferment of staff salaries and renegotiations of lease rentals and payment plans with suppliers, wrote James Anyazwa and Anthony Kitimo for The East African.

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