Kenya Airways says it is in search of a strategic investor due to the negative impact of foreign exchange volatility on its turnaround strategy.
CEO Allan Kilavuka, stated that despite a recent operating profit of KES998m (€6.26m), the depreciation of the Kenyan shilling against the US dollar has resulted in significant forex losses.
With limited government support and growing foreign currency-denominated debts totalling KES196.4bn (€1.23bn), the majority-state-owned carrier sees seeking a strategic investor as the only viable option.
Kenya Airways aims to achieve capacity growth in the coming years, but the biggest threat remains the forex losses. So far, forex losses have reached KES26bn (€163m) from January to September 2023.
Further depreciation of the Kenyan shilling could result in an additional negative impact of KES5.5bn (€35.1m) by December 2023. Kenya Airways’ debts include dollar-denominated loans and liabilities for aircraft purchases, as well as government advances and supplier payments.
Without government intervention, the airline’s future could be at risk. During the parliamentary briefing, the committee sought answers regarding the airline’s projected financial health, debt status, impact of currency depreciation, and strategies to improve operational viability.
Despite the existing challenges, Kilavuka expressed optimism that Kenya Airways would return to profitability in the 2024 financial year through increased revenue and passenger numbers.
