Bring on board the right strategic investor at KQ

Kenya Airways planes at the Jomo Kenyatta International Airport. FILE PHOTO | NMG

As Kenya Airways prepares to tap a strategic equity investor, it is important for the carrier to get an investor with aviation expertise and deep financial muscle.

The task of turning around an airline that returned a gigantic loss of Sh38.3 billion and set back taxpayers by tens of billions is not an easy one.

Therefore, the priority should hinge on bringing on board a long-term partner, preferably a top global airline.

Kenya Airways was privatised in 1996, but sank into debt and losses in 2014 after a failed expansion drive and a slump in travellers.

Before its privatisation, the airline made huge losses and needed annual cash injections from the government.

A similar scenario is playing out under the majority state ownership.

Those shepherding the sale must avoid private equity firms, who often have a short-term view and seek to profit from their stake disposal.

Kenya Airways needs cash and strategic input to exploit the lack of connectivity on the continent and a growing Asian market to win back market share from competitors like Emirates, Qatar and Turkish Airlines.

This underlines the need for a cash-rich strategic investor with a track record of running profitable airlines.