Kenya Airways is bankrupt, Senate team told

Kenya Airways managing director Mbuvi Ngunze during Investors briefing In Nairobi on July 30.Photo/Enos Teche.
Kenya Airways managing director Mbuvi Ngunze during Investors briefing In Nairobi on July 30.Photo/Enos Teche.

A financial analyst on Friday told a Senate committee inquiring into financial crisis at Kenya Airways that the national carrier is bankrupt.

The airline on Thursday announced a Sh29.7 billion pre-tax loss for the financial year ending March 2015.

Martin Odipo, a financial analyst at Khoya and Company, told the committee chaired by Kisumu senator Anyang’ Nyong’o that the proposed bailout will have no impact unless KQ changes its operation model.

He recommended that the bailout proposed for KQ should be given as debt “so as not dilute the current shareholding within the company”.

“Even if we pump Sh30billion into the airline, unless they have another model, I don’t see it going anywhere. If they have to continue with the business, the model must change. The debts are high and the losses are getting worse.The government should give the loan with a small interest rate, maybe two per cent,” Odipo told the committee.

He claimed there was a plot by Afrexim bank to buy Kenya Airways at a cheaper price saying the move by the bank to give the airline several loans was a plot to sabotage it financially and leave it with no option but to sell its aircrafts at a throwaway price.

Odipo who represented KQ workers after they were laid off two years ago told the committee that the proposals he gave in his report were ignored by the airline.

Responding to Nyeri Senator Mutahi Kagwe who had asked him whether the airline was insolvent, Odipo replied, “I think it is insolvent.”