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Kenya Airways gets Sh4.2 billion government loan

BUSINESS
By Reuters | May 28th 2015

NAIROBI - Kenya has given loss-making national carrier Kenya Airways a Sh4.2 billion ($43 million) loan to help turn the business around, the head of parliament's Budget Committee said.

The airline was "facing challenges" from a drop in revenue related to the Ebola epidemic and a slump in tourism, Mutava Musyimi, chairman of the Budget and Appropriations Committee, said in a report presented to parliament late on Wednesday.

"The carrier has been given a loan ... through the supplementary estimates,” he said, without giving a timeline for its disbursement.

In the year ended March 2014, the airline, which is part-owned by Air France KLM posted a pretax loss of 4.86 billion shillings, a 55 percent reduction on the loss it recorded a year earlier.

It also reported a pretax loss of 12.5 billion shillings in the half-year ending September, including a paper loss of 5.4 billion shillings due to a write down on aircraft being retired from its fleet.

It also warned at the time of reporting the half-year results in November that its "earnings" for the year ended March 2015, due to be released next month, will be at least 25 pct down on the previous year.

For the year ended March 2014 it had reported a net loss of 7.86 billion shillings and loss per share of 6.35 shillings.

An outbreak of the Ebola virus in three West African nations last year forced the carrier stop its flights to Liberia's capital Monrovia and Sierra Leone's Freetown in August, at a likely cost of 3-4 percent of its annual revenue or $40 million, the airline said in November.

It resumed flights to Liberia earlier this year.

Tourist arrivals to Kenya have also fallen due to insecurity concerns, hurt by a series of attacks blamed on Somalia's al Shabaab insurgents.

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