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Kenya Airways Secures $50 Million Loan, Awaits $500 Million Capital Injection

Kenya Airways Secures $50 Million Bridge Loan Amid Delayed $500 Million Capital Injection
Kenya Airways has obtained a $50 million short-term loan from local commercial banks to address immediate working capital requirements, including the procurement of spare parts and engine servicing. This bridge financing comes as the airline experiences delays in securing a $500 million capital injection from a strategic investor. The delay is attributed to pending regulatory approval of the airline’s investment memorandum by the government, which holds a 49% stake in the carrier. This approval is a necessary step before the capital-raising initiative can proceed.
Group CEO Allan Kilavuka acknowledged the challenges during the presentation of the airline’s financial results for the six months ending June 30, 2025. He stated, “We had hoped to close this in 2024, but are currently waiting for approval from the main shareholder. We are not just sitting pretty; we have opted for bridge financing to help us in the current environment.” The planned $500 million recapitalisation is considered vital for stabilising liquidity, supporting fleet expansion, and diversifying revenue streams. However, the process faces potential regulatory and financial obstacles, with investor confidence remaining cautious as they await clearer indications of Kenya Airways’ financial stability and strategic direction.
Financial Performance and Operational Challenges
Kenya Airways reported a return to losses in the first half of 2025, posting an after-tax loss of KES 12.15 billion ($94 million), a significant reversal from a KES 513 million ($4 million) profit in the same period the previous year. Revenue declined by nearly 19% to KES 74.5 billion ($577 million), reflecting a 14% drop in passenger numbers and a 16% reduction in available seat capacity. Operational difficulties included the temporary grounding of three Boeing 787-8 aircraft—accounting for one-third of the airline’s widebody fleet—due to global supply chain disruptions and engine shortages. One of these aircraft returned to service in July, with the remaining two expected to resume operations later in the year.
Despite a 4.6% reduction in costs to KES 86.7 billion ($671 million), Kilavuka highlighted ongoing challenges posed by global supply chain constraints. He noted that demand for original equipment spare parts exceeds supply by 10-20%, with delivery disruptions affecting approximately 40% of airlines worldwide.
Kenya Airways had initially planned to add four narrowbody aircraft in 2025 but succeeded in introducing only one Boeing 737-800, bringing the group’s total fleet to 42 aircraft. This fleet comprises 33 planes under Kenya Airways and nine De Havilland Canada DHC-8-Q400s operated by its low-cost subsidiary, Jambojet.
Strategic Outlook and Market Context
Looking ahead, Kenya Airways faces both internal operational challenges and intensifying competition within the African aviation sector. Competitors such as Air Mauritius and Azul are also undergoing financial restructurings, and a successful capital injection could enable Kenya Airways to expand its operations, potentially triggering competitive responses across the region.
Kilavuka emphasised the airline’s strategic priorities, stating, “Our focus remains clear: restoring full fleet capacity, advancing cost optimisation, and completing our capital raising programme to strengthen our balance sheet. These measures will ensure we emerge stronger, leaner, and better positioned to deliver long-term value for our shareholders, customers, and partners.”
The current Kenya Airways fleet includes nine Boeing 737-800 narrowbodies, nine Boeing 787-8 widebodies, eleven Embraer 190 regional jets, and four cargo aircraft comprising two Boeing 737-300SF and two Boeing 737-800SF freighters.

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