The Nairobi Securities Exchange (NSE) has lifted the suspension on Kenya Airways PLC shares, allowing them to be traded again. This comes after the airline’s recovery, including posting a profit after tax and the withdrawal of the National Aviation Management Bill 2020. Kenya Airways had faced serious financial struggles, including near bankruptcy in 2018 due to heavy debt from its aggressive expansion strategy. The suspension of its shares in March 2020 happened amid government plans to renationalize the airline.
In August 2024, Kenya Airways reported a profit of Kshs 513 million for the first half of the year. This is the airline’s first profit after tax since 2013. This turnaround is due to focused efforts on improving customer service, operational efficiency, financial discipline, and innovation. Lifting the suspension signals Kenya Airways’ recovery and strength in overcoming its challenges.
The shift in Kenya Airways’ performance is expected to enhance investor trust, not just in the airline but across the aviation sector. As trading resumes, both local and international investors are likely to take renewed interest in the airline. This could potentially bring in more foreign investment into Kenya’s aviation industry. Other airlines and transport companies may take note of Kenya Airways’ recovery, adjusting their strategies, which could lead to more innovation and operational improvements.
The recovery of the airline and the resumption of trading will also likely benefit the government’s revenue collection. With Kenya Airways profitable, it is expected to contribute more through corporate taxes. The airline’s improved financial performance means higher taxable income. Moreover, increased trading on the NSE could boost government revenue from capital gains tax, as investors buy and sell Kenya Airways shares. Stamp duty from share transactions will also generate more tax revenue.
Additionally, a stronger Kenya Airways could contribute to broader economic growth, especially in sectors like tourism and trade, which heavily depend on air travel. The withdrawal of the National Aviation Management Bill 2020, which had raised concerns about government control, signals a move toward a more market-driven approach. This shift could influence government policies for other state-owned enterprises, encouraging more autonomy in their operations.
