Kenya Airways, based in Nairobi, is striving to recover over USD 11.6 million currently held in Ethiopia due to foreign exchange restrictions.
The airline’s CEO Allan Kilavuka revealed that negotiations between Kenya and Ethiopia were underway to alleviate these constraints as the funds, stuck in Ethiopian banks, continue to lose value due to a 30% drop in the Ethiopian Birr against the US dollar.
In an interview with Business Daily Africa, Kilavuka highlighted the challenges of blocked funds across multiple countries, including Ethiopia, where devaluations have significantly impacted the airline’s revenue. The CEO stated, “We have significant amounts of blocked funds… Unfortunately, because of the forex regime, you cannot always hedge by selling in US dollars.”
Kilavuka also pointed to improvements in Nigeria, where Kenya Airways faced similar challenges. “Nigeria has improved… once they liberalized, we were able to remove our money,” he said.
Despite these difficulties, Kenya Airways recently posted its first half-year profit in over a decade, earning USD 4 million for the six months ending June 2024. The airline credits increased passenger numbers and reduced debt costs for this turnaround.
Source: CH-Aviation
Image source: Kenya Airways
