The Cabinet has approved USD 350 million (about Ksh45 billion) in shareholder financing for Kenya Airways to meet financial obligations, pay for aircraft maintenance and return grounded planes to service.
The government announced the decision in a statement after a Cabinet meeting at State House, Nairobi, on Friday, October 9, 2026. It said the money forms part of the airline’s turnaround plan.
How the financing will be paid out and repaid
The National Treasury will oversee disbursement, which will come in tranches. Kenya Airways will have up to 10 years to repay. The loan may convert into equity, subject to the necessary approvals.
Ksh122 billion in state loans to become tradable equity
The Cabinet also endorsed converting Ksh122 billion in existing government loans, plus accrued interest, into a tradable instrument that qualifies as equity. Reuters valued the sum at about USD 941 million. The government said the step would strengthen the airline’s balance sheet and support future capital raising.
The conversion adds no cash to the airline. The USD 350 million is the only new money.
Losses and negative equity set the backdrop
Kenya Airways swung to a net loss of KES 17.2 billion in 2025, from a profit of KES 5.4 billion a year earlier, Khusoko reported. Revenue fell 14.3% to KES 161.5 billion, and passenger numbers dropped 13% to 4.55 million.
Three Boeing 787-8 Dreamliners sat grounded for much of December 2025 because of supply chain constraints and limited engine availability. That cut long haul capacity by about 20%. Engine problems on three of the airline’s nine 787s had already driven a KES 12.15 billion loss in the first half of 2025.
Total equity stood at negative KES 132 billion at the end of 2025. Liabilities exceeded assets by that amount.
Shareholder approvals remain the gate
The Cabinet said both measures remain subject to corporate, shareholder and regulatory approvals. The airline’s shareholder register shows why that matters. As of April 8, the National Treasury held 48.9%, KQ Lenders Company 2017 Limited held 36.3%, KLM held 7.76%, the employee share ownership scheme held 2.44% and individual and institutional investors held 4.6%, according to the airline’s statement.
Under the shareholders agreement, any significant change in the holdings of the Treasury, KQ Lenders or KLM requires approval at a general meeting. Kenya Airways later issued a cautionary notice to shareholders and investors on the Cabinet decision.
New board, and a search for an investor
President William Ruto said on February 22 that Kenya Airways would receive a new board. The airline appointed four directors on March 5: Kiprono Kittony as chairman, with David Ndii, Chris Diaz and Winnie Nyamute. The changes followed Allan Kilavuka’s exit as group managing director and CEO in December 2025.
The government has been seeking a strategic partner to inject KES 258 billion into the airline, Khusoko reported in April. The airline targets a fleet of 59 aircraft by 2032, up from 34.
What the airline contributes to the economy
The government said Kenya Airways adds more than USD 1.3 billion a year to Kenya’s Gross Domestic Product through tourism, trade and regional connectivity. It said the measures aim to protect that contribution and the airline’s financial position.
Shareholders and regulators now hold the next decision. Until a general meeting and the regulators sign off, the loan terms and the debt conversion stay as proposals.
