ADS
Kenya Airways shares suspension extended for another year
04/01/2023 22:56 in Business News

The local stock market said Wednesday that trading in Kenya Airways shares has been put on hold for another year while the ailing national carrier tries to generate a profit.

 

The airline has been operating in the red for years, and Kenyan President William Ruto stated last month that the government was prepared to sell all of its shares in the company.

 

Since July 2020, when the Covid-19 outbreak destroyed international air travel, Kenya Airways shares have been suspended.

The local stock market said Wednesday that trading in Kenya Airways shares has been halted for another year as the ailing national airline struggles to earn a profit. According to a statement from the Nairobi Securities Exchange, "the extension of suspension intends to enable the business (to) complete its operational and corporate reform process."

 

Kenya Airways is 48.9 percent owned by the government and 7.8 percent by Air France-KLM.

 

During his first trip to the United States as Kenya's president last month, Ruto told Bloomberg News, "I'm prepared to sell the entire Kenya Airways.

 

Ruto allegedly met with representatives from US airline Delta Air Lines while traveling. "I'm not in the business of having an airline that merely has a Kenyan flag, that's not my business," he reportedly stated.

 

In November, a pilot strike that lasted several days and caused hundreds of aircraft cancellations and thousands of delayed customers made Kenya Airways' problems worse.

 

Shares of Kenya Airways were first halted in 2020 while MPs were debating a proposal—since abandoned—for the state to acquire full control of the airline.

 

Following the fall of East African Airways, the airline, whose tagline is "The Pride of Africa," was established in 1977. It presently travels more than four million people to 42 destinations yearly.

Although the government has invested millions of dollars to keep it afloat, it hasn't turned a profit since 2012.

 

The International Monetary Fund demanded advancement on structural changes in Kenya last month when it announced a new $447 million (or around Ksh.55 billion) loan for the government as part of a 38-month aid package.

 

The IMF emphasized the "urgency" of "addressing risks" at Kenya Power and Kenya Airways, two mostly state-owned utilities.

 

The airline recorded a half-year loss of $81.5 million (about Ksh. 10 billion) in August, blaming high fuel prices, but this was a significant improvement above the loss of $94.6 million (roughly Ksh. 11.6 billion) in the same time the previous year.

According to local media sources, Kenya Airways would get an extra state bailout of nearly $280 million (or roughly Ksh34.5 billion) in a mini-budget anticipated this month, citing a letter from Treasury Cabinet Secretary Njuguna Ndung'u to the IMF at the end of December.

 

 

The airline has been operating in the red for years, and Kenyan President William Ruto stated last month that the government was prepared to sell all of its shares in the company.

 

Since July 2020, when the Covid-19 outbreak destroyed international air travel, Kenya Airways shares have been suspended.

COMMENTS
Comment sent successfully!