Kenya Airways Seeks Govt Bailout to Survive COVID-19 Impact

Kenya Airways Seeks Govt Bailout to Survive COVID-19 Impact

Kenya Airways (KQ) has applied for a state bailout to avoid its collapse, after the suspension of all its international passenger flights with effect from 25th March 2020, so as to curb the spread of the global COVID-19 pandemic.

The suspension in turn resulted in grounding of its aircraft, cutting off the airline’s source of revenues.

According to KQ’s Chief Executive Officer, Allan Kilavuka, the state aid will go a long way in helping the airline maintain the grounded aircraft, pay staff salaries and pay security, water and electricity bills.

However, the airline did not reveal the amount of cash bailout it has applied for.

Already, Kenya Airways said it recorded a loss of $8 million in revenues after the suspension of its Nairobi-Guangzhou route, amid the coronavirus outbreak. Early last week, the airline sent some of its workers on an unpaid leave with effect from 1st April 2020, the management team taking a 75% pay cut, and the CEO getting an 80% pay cut.

Although KQ is still operating international cargo flights and local passenger flights, the revenue from the two is not enough. Business Daily reports that in 2018, local flights contributed only 8% of its sales.