A confidential report titled Project Simba Memorandum, dated February 20, 2019, reveals Kenya Airways faces a Sh220 billion debt burden and risks technical insolvency without immediate government support, according to sources.
The document, submitted to the Cabinet, states the airline lacks cash flow reserves and cannot generate positive operating cash flow. It warns that failure to address the crisis could lead to aircraft repossession by lessors and trigger a $750 million (Sh75 billion) government guarantee to protect local banks that converted debt into equity.
Kenya Airways has proposed a restructuring plan involving a government buyout of its foreign partner KLM, banks, and minority shareholders. The report also details the contentious decision to entrust Kenya Airways with managing Jomo Kenyatta International Airport, a move opposed by the Kenya Airports Authority and aviation unions.
The document emphasizes that without remedial action, the airline’s collapse would destabilize its financial obligations and impact national aviation infrastructure.
