Kenya Airways to Get Ksh 45.3 B Lifeline as Govt Moves to Return Grounded Planes to Service

The Cabinet has approved Ksh45 billion in shareholder financing for Kenya Airways to help the national carrier meet urgent financial obligations, including aircraft maintenance and the return of grounded planes to service.

The decision was announced in a Cabinet update issued on Friday, October 9, 2026, following a meeting at State House, Nairobi, as the government steps up efforts to support the airline’s long-term turnaround plan.

“To support the turnaround of national carrier Kenya Airways, Cabinet approved USD350 million in shareholder financing to meet urgent financial obligations, including aircraft maintenance and returning grounded planes to service,” read part of the update.

Govt Reveals How the Ksh45Billion Kenya Airways Funding Will Be Disbursed

According to the Cabinet, the funding will be disbursed in tranches under the oversight of the National Treasury, with a repayment period of up to 10 years.

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The government said the measures form part of a broader strategy to strengthen the airline’s financial position and support its recovery.

In addition, the cabinet noted that the funding arrangement will remain subject to the necessary corporate, shareholder and regulatory approvals.

“The funds will be disbursed in tranches under National Treasury oversight, with a repayment period of up to 10 years and the possibility of conversion into equity, subject to the necessary approvals,” read part if the update.

In a separate measure aimed at strengthening the airline’s balance sheet, Cabinet endorsed a proposal to convert KSh122 billion in existing government loans, together with accrued interest, into an equity-qualifying tradable instrument.

The proposed conversion is expected to improve the airline’s financial position and support future capital-raising efforts.

“The meeting also endorsed the proposed conversion of KSh122 billion in existing Government loans, plus accrued interest, into an equityqualifying tradable instrument to strengthen the airline’s balance sheet and support future capital raising,” 

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Cabinet further said that the government is pursuing the measures as part of Kenya Airways’ long-term turnaround plan, with the aim of improving its financial sustainability and operational performance.

It highlighted Kenya Airways’ wider economic importance, noting that the airline contributes more than USD1.3 billion annually to Kenya’s gross domestic product through tourism, trade and regional connectivity.

They noted that the airline plays a key role in linking Kenya to international markets, supporting tourism and facilitating the movement of passengers and cargo.

Therefore, the government said the proposed interventions are intended to safeguard the airline and sustain its contribution to the economy.

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