The $305.5 million (36 billion Kenyan Shillings) loan to flag carrier Kenya Airways in the current financial year is conditional and will be released in installments on achieving set targets, Business Daily newspaper reported, citing a Ministry of Transport official.
“We have set for them targets and we only release funds when they achieve those targets as advised by Seabury,” said Transport Principal Secretary Joseph Njoroge.
The targets, which have been set by the government, are assessed by Seabury, an advisory firm overseeing the restructuring of KQ, which is known by its international code.
Seabury has been appointed by several airlines worldwide, including India’s Jet Airways, Germany’s Air Berlin, and Norwegia’s Air Shuttle, among others, to advise them to cut losses, increase revenue, and restructure their debts.
Njoroge said there had been a move in the right direction regarding KQ meeting the targets and that it is a matter of time before they revert to profitability, the newspaper said.
The airline narrowed its net loss by 56.58 percent for 2021 amid higher revenue as travel picked up after the easing of Covid-19 restrictions.
Some parameters measured under the set targets include operational efficiency and cabin loads.
The 36.6 billion Kenyan Shillings bailout, which is included in the 2022/2023 budget, is an addition to the 20 billion Kenyan Shillings earlier approved bailout. This will push the government’s support to 56.6 billion Kenyan Shillings in less than a year, making it the largest corporate bailout in Kenya, the newspaper reported.
(Editing by Seban Scaria firstname.lastname@example.org)