The Kenya National Treasury plans to reduce Kenya Airways‘ (KQ) state funding by $79.8 million, taking it from $239.5 million to $159 million, according to its 2022-23 supplementary budget.
The Kenya National treasury has released its debut Kenya Kwanza supplementary budget for the financial year 2022/23 with a proposed increase in spending from $26.7 billion to $29.6 billion. The government plans to cut domestic borrowing and increase external borrowing, resulting in a net borrowing reduction of about $541 million.
The treasury is reducing its support for the flag carrier in line with the government’s strategy to lessen the airline’s dependency on state funds by the end of 2023. Earlier this year, in its draft Budget Policy for 2023, the government said it would develop a turnaround strategy for Kenya Airways. In the strategy, the airline will receive $283 million in financial aid from the state to continue operations.
Despite being funded by the government, the airline continues to operate on significant losses, and in the first quarter of 2022, taxpayers spent nearly $207 million to save the airline. The funds were used for aircraft maintenance, employee salaries, settling utility bills, and daily airline operations, among other things.
The proposed turnaround strategy to save the insolvent airline focuses on saving taxpayers’ money spent to keep it flying. Kenya’s head of state, President William Ruto, said that the state was looking for a strategic investor to buy a controlling stake in the national airline. It was reported that the president pitched a plan to Delta Air Lines last year, in which he proposed a bid to sell the government’s 48.9% stake in KQ.
