The Kenyan government has budgeted a debt guarantee of KES17.19 billion shillings (about USD129 million) for Kenya Airways (KQ, Nairobi Jomo Kenyatta) in the Financial Year 2023/24.

This is according to a government statement following a briefing to the Public Debt and Privatisation Committee by the Parliamentary Budget Office (PBO) on the expenditure for the FY 2023/24 of the Consolidated Fund Services (CFS), a government account where all money raised or received by or on behalf of the national government is paid.

According to The Star newspaper and Metropol TV, the amount is KES2.51 billion (USD18 million), more than the debt guarantee granted to the airline in the previous financial year.

"As of June 2022, the total outstanding guaranteed debt was KES136.6 billion (USD984 million) consisting of KES68.1 billion (USD490 million) and KES67.3 billion (USD484 million) commercial and bilateral loans, respectively, showing an elevated exposure to contingent liabilities," the report said.

It also states that the government will spend an estimated further KES22.16 billion (almost USD160 million) in the FY 2024/2025, repaying Kenya Airways' loans. The amount would slightly drop to KES19.55 billion (USD140.7 million) in 2025/2026.

The report further noted that Kenya Airways' guaranteed loan becomes a liability of the national government, whose repayment is a charge on the CFS as provided under the Public Finance Management Act.

Kenya Airways’ net loss more than doubled to hit a record KES38.26 billion (USD275 million) in the FY ending December 2022 on a rise in financing costs after the government took over servicing one of the dollar-denominated loans. The net loss grew 140% from KES15.87 billion (USD114 million) in 2021 and brings the flag carrier's accumulated losses to KES172.68 billion (USD1.2 billion).

The airline, in its FY 2022 financial report, reported 66% improved revenue to KES117 billion (USD842 million) on the back of a new restructuring plan and forecast sustainable recovery in 2024. The airline would have reported an operating profit had it not been for the devaluation of the Kenyan shilling against major currencies and 160% fuel cost increases year-on-year. The process to reduce operational costs by 10% by 2024 was at a 60% completion rate, the airline said, and aircraft lease cost had been reduced by 22% or KES4 billion (USD28.7 million), the full benefits to be realised in 2023.

The last time the national carrier made a profit was in 2012, when it closed with net earnings of KES1.66 billion (USD11.9 million).