The Kenyan government has put Kenya Airways on offer to foreign investors at Sh258 billion, bundling additional assets to make the deal more attractive for an airline currently operating on negative equity with debts far exceeding its asset base.
The Kenyan government has formally offered Kenya Airways (KQ) to foreign investors at a valuation of Sh258 billion, attaching additional assets in an effort to make the deal more attractive for prospective buyers.
The move comes as the national carrier continues to grapple with negative equity—where liabilities significantly exceed assets—following years of financial challenges, heavy debt, restructuring efforts and the lingering impact of the COVID-19 pandemic.
Treasury Cabinet Secretary John Mbadi confirmed the sale process during a briefing in Nairobi on December 20, 2025. “We have opened the door to credible foreign strategic investors who can inject capital, bring expertise and help turn around Kenya Airways,” Mbadi said. “The Sh258 billion valuation is based on independent assessments, but we are prepared to sweeten the offer by bundling other viable assets to ensure the transaction is mutually beneficial.”
While the government has not publicly named the additional assets, sources familiar with the process indicate they may include real estate holdings, slots at key international airports, ground-handling rights or stakes in related aviation subsidiaries. The package is designed to offset KQ’s current balance-sheet weaknesses and provide immediate value to a buyer.
KQ has been loss-making for over a decade, with accumulated losses exceeding Sh140 billion by mid-2025. The airline’s debt stands at approximately Sh120 billion, including loans guaranteed by the government and obligations to aircraft lessors. Negative equity—where total liabilities surpass total assets—has persisted despite multiple bailouts, fleet rationalisation and route optimisation.
Aviation analyst Capt. Morris Mwaniki said the valuation reflects a distressed sale rather than market strength. “Sh258 billion is ambitious given KQ’s financial position,” Mwaniki said. “But attaching other assets could make it appealing to a foreign carrier looking for regional access, slots, traffic rights or a foothold in East Africa. The buyer would be acquiring a brand and infrastructure more than current profitability.”
The government has been under pressure to exit its majority ownership in KQ after years of taxpayer-funded support. Previous attempts to find strategic partners—including talks with Qatar Airways, Ethiopian Airlines and Middle Eastern carriers—have stalled over valuation, control and governance concerns.
Kenya Airways CEO Allan Kilavuka said the airline remains committed to transformation. “We have stabilised operations, reduced losses and are growing cargo and regional routes,” Kilavuka said. “A strategic investor with deep pockets and global expertise would accelerate our recovery and help us compete effectively in the region.”
The sale process will be managed through a competitive bidding framework overseen by the National Treasury and the Privatisation Commission. Expressions of interest are expected to close in the first quarter of 2026, with preferred bidders selected by mid-year.
Opposition leaders have criticised the timing and valuation. Wiper Party leader Kalonzo Musyoka said: “Selling KQ at this price after pouring billions of public money into it is tantamount to selling a national asset cheaply. We demand transparency on who is buying and what assets are being bundled.”
The Kenya Airline Pilots Association (KALPA) urged the government to protect jobs and national interest. “Any sale must guarantee job security for our members and maintain KQ as a Kenyan-flag carrier,” KALPA Secretary-General Murithi Mugo said.
The offer comes as Kenya seeks to reduce fiscal pressure from state-owned enterprises. KQ’s debt has been a significant burden, with government guarantees and periodic bailouts contributing to the national debt stock.
Industry stakeholders believe a successful sale could unlock growth for KQ if the investor brings capital, network access and management expertise. Potential suitors include Middle Eastern carriers, African aviation groups and global investment funds specialising in distressed assets.
As the bidding process begins, the government has pledged an open and competitive process. “We want a partner who shares our vision for a strong, profitable national carrier,” Mbadi said. “This is about long-term sustainability, not short-term fixes.”
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