Business
Kenya Airways eyes massive expansion in next 5 years
(Reuters) – Kenya Airways will spend US$3.6 billion over the next five years on new planes and routes, mainly to connect travellers between Africa and Asia, its chief executive said.
Titus Naikuni said trade between Africa and China and India had soared in recent years, growing at an annual rate of about 200 percent, creating huge opportunities in the travel market.
“We are looking at African markets. We are looking at Asia, India and we need to connect these three land masses,” Naikuni said on Thursday.
Ranked as one of Africa’s largest airlines, the carrier that is 26 percent held by Air France KLM, is undertaking a US$250 million cash call that will go towards funding the plan.
“I’m expecting that subscriptions will be 100 percent if not more. It is going to be a success,” Naikuni said, saying that Air France KLM and the government, which holds a 23 percent stake, had agreed to take up their rights.
“What we are looking for is about US$125 million. We have been out in the market place and a number of foreign investors are very keen. That is what makes me very optimistic.”
If the cash call is successful, Kenya Airways will get a boost to its debt equity ratio, which stands at around 1, allowing it to borrow a further US$2.2 billion.
