Kenya Airways Prepares For Strategic Investment

Kenya Airways CEO Allan Kilavuka is hoping that a formal strategic investor search will be launched by the end of 2025, paving the way for future fleet growth.

“We started doing the prep work and documentation,” Kilavuka told Aviation Week on the sidelines of the recent APG World Connect conference in Seville. “That tells me that, by end of this year, we should at least be getting the [government] approval.”

Kenya Airways is listed on three stock exchanges: Dar es Salaam (Tanzania), Kampala (Uganda) and Nairobi (Kenya). The Kenyan government, whose current term runs from 2022 to 2027, owns a 49% stake and supports the idea of bringing in a new investor. This would take the form of additional capital, diluting the existing shareholders.

While informal talks have been underway for some time, Kilavuka said a formal process will widen the range of potential investors.

Kenya Airways previously explored the idea of creating a pan-African airline holding company with South African Airways (SAA), where both airlines would seek strategic investment at holding company level. Kilavuka proposed this to one potential investor, but they were not sure that SAA was ready for the joint-funding structure.

Since then, SAA has formally stepped back and Kenya Airways is now seeking fresh funding independently. However, Kilavuka is keen to find an African airline with a similar strategic vision to replace SAA. This anchor partner would be a national carrier with an established hub, although it does not have to be large. The challenge is getting both the African airline and their government on board.

“What I’m currently doing is looking for another anchor line of similar vision. I’ll be honest; I’m a bit frustrated that it’s not moving as quickly as I thought. I think it’s an urgent project,” he said. “It’s important, but it’s not easy to do. You have to have the vision and the guts to want to do it.”

While partnering up is a complicated process, involving different jurisdictions, currencies and cultures, Kilavuka believes scale and consolidation are essential for African airlines. He pointed to Kenya Airways’ 34-aircraft fleet, or 42 aircraft including the eight aircraft operated by LCC Jambojet.

“Ideally, the number should be about 50 or so, for the market as it exists now. If you add growth in the next five years, you can probably go to 60 or 65,” he said. “That’s why the strategic investment is important. If you get the investment quickly enough, we should be at 60 by 2029. That’s the plan.”