- EDITOR’S BRIEF: The situation at Kenya Airways is a result of several factors, including the COVID-19 pandemic, economic slowdown, and unattainable contracts signed in the past. The government’s efforts to revive the airline are commendable, but more needs to be done to put KQ on a sustainable path to growth and profitability. A partnership with private investors could be a viable option for the airline to inject capital and expertise to turn around its fortunes.
Deputy President Rigathi Gachagua has pointed fingers at the previous regime for the current predicament of Kenya Airways (KQ), stating that state capture has led to the airline’s downfall. Speaking in Botswana, Gachagua mentioned that there are ongoing efforts behind the scenes to revive KQ.
The DP alleged that the previous regime had forced KQ to sign unattainable contracts, which have made it impossible for the airline to meet its operating costs. Specifically, Gachagua referred to aircraft leasing contracts, which were done in such a way that getting out of them would incur heavy penalties. Gachagua further stated that the state capture fellows had been cleverly strategic in designing the contracts to make it difficult for the government to extricate KQ from their grasp.
Despite the challenges, Gachagua expressed optimism that the government was well aware of the situation and working towards reviving KQ as a source of pride for the nation and the African continent.
Kenya Airways has been struggling to stay afloat in the face of challenging economic circumstances, which have made it challenging to keep up with its operating expenses. In its financial statement for the year ended December 31, 2022, KQ reported a loss of Sh38.2 billion, which more than doubled the Sh15.8 billion loss reported in the previous financial year. The increase in losses has been attributed to high global fuel prices and a tight foreign exchange market.
Kenya Airways is one of the major airlines in Africa and has been considered the pride of the continent for years. However, the company’s financial struggles have been weighing it down, and it has been forced to take drastic measures to stay afloat. In 2020, KQ had to seek a government bailout to remain operational after its operations were disrupted by the COVID-19 pandemic. The airline has also been reducing its fleet size, cutting routes, and retrenching employees to reduce costs.
The challenges facing Kenya Airways are not unique to the airline industry, as many companies worldwide have been affected by the COVID-19 pandemic and global economic slowdown. However, the situation at KQ has been compounded by unattainable contracts signed in the past, which have made it difficult for the airline to restructure and operate efficiently.
The government’s efforts to revive KQ are commendable, as the airline is an essential part of the country’s economy and a symbol of national pride. However, more needs to be done to ensure that KQ is put on a sustainable path to growth and profitability. The government must ensure that the contracts signed by KQ are restructured in a way that allows the airline to operate efficiently without incurring heavy penalties.
Additionally, the government should consider partnering with private investors to inject capital into the airline and provide the necessary expertise to turn around its fortunes. A partnership with private investors would not only provide KQ with the funds it needs to restructure and grow but also bring in fresh ideas and management practices that could be crucial to the airline’s success.
