Monday 12th October, 2026 10:59 AM|By Sharon Atieno
Kenya Airways has secured government approval for a Ksh45.15 billion shareholder loan and the restructuring of about Ksh122 billion in existing government loans, in a move aimed at stabilising the national carrier and supporting its long-term turnaround.
In a public announcement posted by Nairobi Securities Exchange dated Friday, October 9, 2026 the airline said the funding would help meet urgent operational obligations, including aircraft maintenance and returning grounded planes to service.
The government loan, equivalent to Ksh45.15 billion will have a repayment period of up to 10 years and may be converted into equity, subject to shareholder and regulatory approvals.
“To support the turnaround of national carrier Kenya Airways,Cabinet approved Ksh45.15 billion in shareholder financing to meet urgent financial obligations, including aircraft maintenance and returning grounded planes to service,” the Cabinet dispatch stated.
The financing is expected to support the airline as it works to restore operational reliability and achieve sustainable profitability.
Government targets Ksh122 billion debt
The government has also approved, in principle, the conversion of existing shareholder loans of approximately Ksh122 billion, together with accrued interest, into an equity-qualifying tradable instrument.
Kenya Airways said the proposed conversion was intended to “restore the Company from its current negative equity position to a positive equity position” and strengthen its balance sheet and creditworthiness.
The restructuring is also expected to support future capital-raising initiatives and attract strategic partners and investors.
However, the airline clarified that implementation remains subject to the execution of transaction documents, shareholder approvals where required, and regulatory clearances from the Capital Markets Authority (CMA) and the Nairobi Securities Exchange (NSE).
KQ battles rising losses
The funding comes as Kenya Airways faces mounting financial pressure. The airline recorded a net loss of Ksh16.08 billion in the six months to June 2026, compared with Ksh12.15 billion during the same period in 2025.
Revenue increased to Ksh81.25 billion from Ksh74.5 billion, but operating costs rose by 13.8 per cent to Ksh91.9 billion, exceeding total income.
The airline also reported a net loss of Ksh17.16 billion in 2025, reversing a Ksh5.4 billion profit recorded in 2024.
Grounded planes remain a priority
As of September 2026, three aircraft were undergoing major servicing after reaching 12 years of operation. The government has identified maintenance and returning grounded planes to service as key priorities for the new financing.
Kenya Airways said the loan would support “continuity of operations” as it implements its broader turnaround plan.
The airline cautioned shareholders and investors to exercise care when dealing in its securities until the outstanding terms of the proposed transactions are determined and formally announced.
The carrier said further announcements would be made once the necessary agreements and regulatory approvals had been secured.
Sharon Atieno
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