According to the Ministry of Transport, the Sh36 billion loan to Kenya Airways for the current fiscal year is conditional and would be delivered to the airline in installments based on achievement of predetermined milestones.
Transport Principal Secretary Joseph Njoroge said the loan has not been released in its entirety to the carrier as it’s pegged on targets that KQ, as the airline is known by its international code, has to meet.
The targets have been set by the government and are assessed by Seabury –a consultant firm that is overseeing the restructuring of KQ.
“We have set for them targets and we only release funds when they achieve those targets as advised by Seabury,” said Eng Njoroge in an interview with the Business Daily.
He did not specify the targets set for KQ which has been making losses for years. KQ tapped US-based consultant Seabury Group to advise it on financial restructuring and a revival plan amid stiff competition from other players such as Ethiopian Airlines.
Seabury has over the years been appointed by several airlines around the world including Indian international airlines Jet Airways, German air Berlin Air, and Norwegian Air Shuttle among others where it has advised them on cutting losses, increasing revenue, and restructuring their debt in some airlines.
The PS said there has been a move in the right direction in terms of KQ meeting the targets and that it is a matter of time before they revert to profitability.
KQ narrowed its net loss for the year ended December by 56.58 percent on higher revenue as travel picked up with the easing of Covid-19 restrictions.
