Kenya Airways Plc, East Africa’s largest carrier, has secured $350 million in government-backed shareholder financing as Kenya moves to shore up the loss-making national carrier, which is seeking strategic investors and fresh capital to stabilize its finances.

President William Ruto announced the funding, which is intended to help the airline meet pressing financial obligations as it pursues a broader restructuring.

The government, the airline’s largest shareholder, is also backing a proposed restructuring of its existing loans to Kenya Airways. Ruto’s office said the Cabinet endorsed converting Ksh122 billion ($941 million) in government loans into a tradable instrument that qualifies as equity, subject to the necessary approvals.

Government moves to ease debt

The financing will be released in installments under the Finance Ministry’s oversight, with a repayment period of up to 10 years and the possibility of conversion into equity. The arrangement could ease immediate funding pressures while giving the government greater flexibility in managing its exposure to the airline.

Kenya Airways has identified balance-sheet restructuring as a key part of its recovery plan, including the possible conversion into equity of principal debt owed to the government and a consortium of local banks. The measures come as the carrier seeks new investors to strengthen its capital base and support its operations.

Losses deepen despite revenue growth

The funding comes after Kenya Airways reported a 32.2% increase in its first-half 2026 net loss, as higher fuel prices, supply-chain constraints and reduced fleet capacity weighed on its performance. The airline recorded a loss after tax of Ksh16.08 billion ($124.23 million) for the six months ended June 30, compared with Ksh12.15 billion ($93.6 million) a year earlier.

Loss before tax rose to Ksh15.92 billion ($123 million) from Ksh12.17 billion ($94 million) in the same period of 2025, even as total income increased 9% to Ksh81.25 billion ($626 million) from Ksh74.5 billion ($574 million) . The divergence highlights the pressure on the carrier to control costs and restore operational capacity while expanding revenue.

Nairobi hub anchors regional reach

Founded in 1977 after the dissolution of East African Airways, Kenya Airways connects passengers and cargo through its Nairobi hub. The airline serves more than five million passengers and transports over 70,000 metric tons of cargo annually, according to the figures provided.

Kenya Airways is the only African member of the SkyTeam airline alliance, offering access to more than 1,060 destinations across 173 countries through its network and partnerships.

The government-backed financing and proposed debt restructuring could help stabilize the carrier, but its recovery will depend on improving profitability, addressing operational constraints and attracting additional investment.