The national carrier, Kenya Airways will receive a further kes 36.6 billion bailout in the year starting July as part of efforts to prop up the airline amid recovery from the Covid-19 travel slump.
The allocation was contained in the 2022/23 budget, shortly after the MPs approved a kes 20 billion bailout for the airline.
This will see Kenya airways receive a total of kes 56.6 billion in under a year, making it the largest corporate bailout in Kenya.
This fresh Treasury allocation is labelled as a strategic government investment which comes after the State dropped the plan to nationalise the airline.
This comes after the national carrier more than halved its losses in 2021 to kes 16.03 billion a 56.68% decline from Kes 36.57 billion posted in 2020.
The Group’s total revenue for the year increased by 33% to Kes 70.221 billion. This is attributed to the airline having sought alternative revenue streams to replace lost revenue. These included air charter services, which increased by 300%, and ancillary revenues, which increased by 65%.
However, Kenya airways still needs money for the maintenance of planes, payment of salaries and settlement of utility bills such as security, water, electricity and parking as well as easing of the effects of the virus.
Without State aid, the airline risked running out of money in the near future against the backdrop of unease among banks about lending to African carriers.
The bailout comes as the State dropped the favoured long-term solution for the ailing KQ that was anchored in nationalisation
