An investor has offered to give Kenya Airways (KQ) airplanes in exchange for a stake in the national carrier as it seeks a fresh capital injection to fund its turnaround plan.
The undisclosed investor is among at least four firms that have expressed interest in investing in the troubled airline, acting chief executive George Kamal told the Business Daily in an interview.
The national carrier is counting on fresh capital, whether in kind or cash, to expand its fleet, restore its capacity, and grow its network in an effort to turn profitable.
Mr Kamal said other investors were keen on buying a stake in the airline, with another seeking to loan Kenya Airways billions of shillings for the turnaround.
Kenya Airways will disclose a plan to secure a deal with potential new investors within weeks as the airline confronts soaring fuel costs, aircraft maintenance delays and a shortage of spare parts, which have constrained capacity despite strong passenger demand.
The carrier reported a net loss of Sh16 billion for the first half of 2026, compared with a loss of Sh12.2 billion in the same period last year.
The airline says it has received interest from investors in the United States, China, South Africa and Singapore.
“The ones who are approaching us, to be honest, are all of those. There is one saying I can give a loan, but I’ll need to take it after this year; the other one says I need equity; and the other one says I have aircraft and I can take equity by putting my aircraft in,” said Mr Kamal.
He declined to disclose who the prospective investors are, saying it could prejudice the negotiations. However, he said the carrier is open to all proposals currently on the table.
A key part of the restructuring plan would be cleaning up the airline’s balance sheet, including the possible conversion into equity of principal debt of Sh131 billion owed to the Kenyan government and a consortium of local banks.
The government is Kenya Airways’ largest shareholder with a 48 percent stake, and the consortium of banks owns 37.91 percent. Getting a strategic investor to pump in capital for fleet expansion is key in the turnaround efforts.
The airline is banking on the fleet expansion to grow its route network for both passenger and cargo volumes, which are expected to boost its revenues and consequently profits.
Currently, the Kenya Airways group has a fleet of 45 planes, including 11 in its subsidiary Jambojet’s fleet.
The 34 in Kenya Airways’ fleet comprise 13 168-seater Boeing 737s, nine 250-seater Boeing 787 Dreamliners, 11 114-passenger Embraer ERJ-190s; and one Boeing 777 with a capacity of up to 400 passengers.
However, the carrier is currently operating with just about 25 planes, with at least nine currently grounded for maintenance.
This has severely strained its capacity to service its network of up to 50 destinations.
But even at full capacity, Mr Kamal argues the airline’s fleet is not enough to meet the current demand.
He targets adding up to 15 airplanes, mostly widebodies like the Boeing 787s and 777s and Airbus A350s, by 2030, with the support of the strategic investor.
Earlier this year, the airline cut back some of its intra-Africa routes due to capacity constraints, despite stable demand.
It stopped its flights to Douala and reduced Abidjan from six weekly to three.
With more planes, the carrier intends to increase capacity and frequency on high-traffic intra-Africa and long-haul routes, including Lagos, Johannesburg, Dubai, and London, which are among its best-performing routes.
Aviation analysts argue that only an aircraft lessor or a major airline could be in a position to offer planes in exchange for equity, but it is a very rare transaction in the industry the world over.
Kenya Airways already has a major foreign airline as a shareholder – KLM-Air France, which came in under a similar recapitalisation process in 1996.
The Dutch carrier injected $26 million (Sh3.4 billion at current exchange rates) in exchange for 26 percent stake in the airline.
Kenya Airways is open to either creating new shares for the strategic investor, which would dilute the stake held currently by other shareholders, or transferring some shares from the existing shareholders.
“We have a lot of equity to be taken. We have Air France-KLM equity there, the shares from the banks. We have a lot of shares, so it doesn’t have to be the majority shareholder to give out the shares, and I cannot dictate that,” said Mr Kamal.
KLM’s stake in the carrier now stands at 7.76 percent.
Follow the story
