Ruto govt eyes foreign takeover to save Kenya Airways

Treasury Cabinet Secretary John Mbadi announced Wednesday that an international expression of interest will be issued to attract a strategic investor expected to inject between $1.2 billion and $2 billion into Kenya Airways. The government plans to bundle additional assets with the airline to make the deal more attractive, given that the carrier operates with negative equity, where liabilities exceed assets.

Restructuring Plan Takes Shape

“The new investor is expected to inject a minimum of $1.2 billion and up to $2 billion into the business,” Mbadi told reporters, declining to provide details on the deal’s structure. “The government took up 63.1 billion shillings from the novation of the Tsavo facility, which it is now servicing. This amount can be converted to equity once we firm up the onboarding of a strategic investor.”

The search for a strategic partner represents a major test for President William Ruto’s administration, which had promised the International Monetary Fund it would find an investor to revitalize the national carrier. Failure to secure the deal remains an unmet condition in Kenya’s program with the Washington-based lender.

Financial Crisis Deepens

Kenya Airways’ financial position has deteriorated significantly. By June 2025, the airline’s negative equity worsened to 129.5 billion shillings from 118.2 billion shillings, as it reported a half-year loss of 12.15 billion shillings compared to a profit of 634 million shillings the previous year. Total liabilities stood at 309.9 billion shillings against assets of 180.3 billion shillings.

The airline attributes recent losses to reduced revenue and passenger numbers after three Boeing 787-8 Dreamliners were grounded for maintenance. The carrier seeks to raise at least $500 million in additional capital to expand and modernize its fleet.

Sweetening the Deal

Industry analysts suggest the government may need to bundle Kenya Airways with other assets, possibly including airport terminals, to attract serious investors. Eric Musau, head of research at Standard Investment Bank, emphasized the investor must provide equity rather than debt to avoid burdening the airline with additional liabilities.

The government previously considered linking the deal to upgrading Jomo Kenyatta International Airport, modeling a partnership similar to Dubai International Airport and Emirates Airlines. However, Kenya abandoned an earlier arrangement that would have seen India’s Adani Group upgrade the airport under a public-private partnership.

News of the strategic investor search has driven Kenya Airways shares up 42.7 percent since January to 5.04 shillings, amid reports of interest from a Middle Eastern airline. The search comes after CEO Allan Kilavuka and Chairman Michael Joseph departed in November and June, respectively.