Business

KQ denies claims it's selling part of its stake to American airline

A Kenya Airways plane. (Photo: Nicolas Economou/ NurPhoto/ AFP)

By Mary Wambui | Sunday, April 14, 2024

Rumours had circulated that the government has agreed to sell 48 per cent of its shares to the Atlanta, Georgia-based airline in a bid to boost its profitability before the end of the year.

National Carrier Kenya Airways has denied claims that it is selling a percentage of its shares to American Carrier, Delta Airways.

"This is incorrect, no such statement has been issued by our CEO," the airline said in response Sunday to the claims on X.

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Rumours had circulated that the government has agreed to sell 48 per cent of its shares to the Atlanta, Georgia-based airline in a bid to boost its profitability before the end of the year.

The airline is a major airline in America largely owned by public companies and individuals.

In its part KQ is a national airline owned by the government which currently holds a majority of 48.9 per cent stake followed by banks at 38 per cent, Dutch airline KLM at 7.8 per cent and employees at 2.4 per cent.

"Expressed interest"

In an earlier interview with Citizen TV, KQ CEO Allan Kivaluka revealed that multiple investors had expressed interest in investing in the airline, a possibility that it was open to exploring.

"We're looking for an equity investor that can invest up to a maximum of 49 per cent...that's the maximum. The reason that the maximum is because the rules in Kenya don't allow you to have an AOC or an airline operating certificate if you have more than 50 per cent foreign ownership," said Kilavuka.

Such a move could have seen the National government lose its majority stake of 48 per cent should a deal get through.

In March, the airline announced an operating profit of Sh10.53 billion for last year, a notable increase since 2017.

"It is an indication that we are well on our path to recovery," Kilavuka said at the time.

The revenue growth, he said was underpinned by a 35 per cent rise in passenger numbers.

To grow the profit margin, KQ is banking on increasing its fleet and flights on some popular routes to meet the growing demand.

"The airline expects to receive an additional cargo freighter soon and it will receive another Boeing 737-800 passenger jet by the third quarter of this year to boost capacity, Kilavuka added.