Kenya Airways (KQ)’s indebtedness to the Kenya Airports Authority (KAA) has risen to Sh4.62 billion, revealing an increase of the airport use debt by Sh377.55 million in the last year.
The East African nation’s Auditor General, Nancy Gathungu in a report for the year ended June 2021 says the sum due has increased by Sh377.55 million from Sh4.24 billion as of June 30, 2022.
The amount constitutes 40 per cent of the Sh11.64 billion that the State airports custodian is owed by other enterprises and airlines that operate in facilities such as Jomo Kenyatta International Airport, Moi International Airport and Kisumu International Airport.
“An amount of Sh570 million is also owed by Kenya AirFreight Handling Limited, a subsidiary company of Kenya Airways Limited,” said Ms Gathungu in the report.
The KAA charges airlines for, among others, landing, take-off, noise, emissions, parking, and use of passenger facilities.
The services offered by KAA are critical to ensuring safety and efficiency in the aviation industry.
The debt is a signal that KQ has been allowed to continue operating without paying some basic fees at airports in Kenya.
The government is the major shareholder in the national carrier which it has been supporting with a series of bailouts after the company sank into multi-year losses.
KQ recorded a ninth consecutive half-year loss, sinking Sh15 billion deeper into the negative equity position.
The airline, which has been surviving on State bailouts since the Covid-19 pandemic, reported an Sh9.8 billion loss in August — a better performance than the Sh11.48 billion loss it recorded in a similar period a year earlier.
It booked a further Sh5.3 billion loss on hedged foreign exchange differences, driving its total comprehensive loss to Sh14.9 billion.
Kenya Airways’ KAA debt has increased barely a few months after Parliament asked the National Treasury to intervene and help the airports’ manager to recover Sh7.5 billion owed by the carrier, in an effort to resolve the airport debt that has stuck for years.
A report by the National Assembly’s Public Investments Committee (PIC) says there was a need to engage the Treasury to fast-track the recovery of the debt since it was hurting operations.
Previously, the KAA had been engaging KQ directly on the debt question.
“The Committee recommends that the Cabinet Secretary for the National Treasury should intervene and have the amount owed to the KAA by the KQ settled,” said the National Assembly’s PIC in a report tabled in the House in June.
