An undisclosed investor has proposed handing Kenya Airways (KQ) aircraft in exchange for a strategic stake in the national carrier, as the airline pushes to raise fresh capital to rebuild its fleet and stabilise its balance sheet.
Acting Group Managing Director and CEO Capt. George Kamal said the offer is one of several structures on the table as KQ works to close a capital-raising process it hopes will conclude within weeks.
The airline is weighing whether to issue new shares to a strategic investor — diluting existing shareholders — or pursue alternative arrangements such as the aircraft-for-equity proposal.
At least four firms, from the United States, China, South Africa and Singapore, have expressed interest in investing in the carrier, KQ Chairman Kiprono Kittony said, adding that the airline would run a transparent process given its listing on the Nairobi Securities Exchange.
Kittony said the board expects to disclose details of the preferred investor or investors within weeks.
The push for new capital comes as KQ’s losses widen.
The airline reported a net loss of roughly Sh16 billion for the six months to June 2026, its second-largest half-year loss since 2008 and a sharp deterioration from the Sh12.2 billion loss recorded in the same period last year.
Revenue rose 9 percent to Sh81 billion on resilient passenger demand, but operating costs climbed 14 percent to nearly Sh92 billion, driven largely by a spike in fuel prices linked to disruption in the Middle East and by aircraft maintenance delays that have kept part of the long-haul fleet grounded.
Negative equity widened to roughly Sh148 billion from about Sh132 billion at the end of last year, while total liabilities climbed past Sh328 billion.
Chief Finance Officer Mary Mwenga said the carrier’s debt stands at about Sh152 billion, with roughly 90 percent of it owed to the Kenyan government, which holds just under half of KQ’s shares and remains its majority backer.
Grounded wide-body jets have been a central drag on earnings, cutting into KQ’s most lucrative long-haul routes even as demand has held up.
A Boeing 787-8 rejoined the fleet in mid-July and a Boeing 777-300ER has since been redelivered, moves the airline says should help recapture lost capacity in the second half of the year.
Kittony said the carrier’s priorities are operational stability, tighter cost discipline, reducing leverage and completing the capital raise, with talks already under way with prospective investors.
The Treasury has told Parliament the search for a strategic investor is part of a broader recapitalisation plan expected to conclude by December, after the government moved earlier this year to consolidate a majority shareholding in the airline.
Whether an aircraft-for-equity deal — echoing the model KLM used decades ago for its 26 percent stake in KQ — makes the final agreement remains unclear, with the airline saying all options stay open until a preferred bidder is named.
