The Kenyan government will offer Kenya Airways’ creditors $750m in guarantees to help the heavily-indebted and lossmaking airline raise additional capital to continue its recovery, official documents have revealed. The US$238m the government has lent the company since 2014 will be converted into equity, government officials said. The guarantees, which are subject to parliamentary approval, will cover $525m owed to the US ExIm Bank and $225m borrowed from local lenders, according to a cabinet document seen by the Financial Times. The Kenyan government owns 29.8% of the airline. It is not clear how many shares its debt will be converted into, when the conversion will happen or how much other shareholders will be diluted. Air France-KLM owns 26.7% and the International Finance Corporation, the investment arm of the World Bank, 9.6%. Henry Rotich, finance minister, said in a statement released by the airline that the cabinet made the decision because it wanted “to support Kenya Airways as it is a valuable national strategic asset”. “We are keen to secure the airline’s future and ensure it has a healthy liquidity profile and remains operational,” he said, adding that the proposed restructuring “will generate concessions from all stakeholders”. Aly-Khan Satchu, a Nairobi-based investment adviser, said the government guarantee “is a big statement because they’ve been reluctant to give these guarantees in recent years”. <br/>
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Air France-KLM Group’s new low-cost, long-haul Boost arm could provide trans-Atlantic services as well as helping Europe’s biggest airline to compete with Persian Gulf carriers on routes to Asia. Asked whether the start-up might also perform westbound flights, Franck Terner, who heads the company’s Air France unit, of which Boost will be part, answered: “Could be, why not?” Air France-KLM views the SNPL pilot union’s plans to meet on June 8 and discuss whether to put Boost contracts to a vote of members as a positive development, he said in an interview in Cancun, Mexico. Flight crew belonging to the labor group have already backed the terms in principle after the company scrapped a 15 percent cut in pilot pay at the unit in favor of a 1.5% reduction across the whole of Air France’s cockpit employees. Terner, who was speaking on the fringes of the IATA’s annual meeting, added that the group will move forward with Boost regardless of pilot backing, adding that “the negotiation itself is finished.” Former Air France-KLM CEO Alexandre de Juniac -- who now heads IATA -- was forced out of the airline after seeking to expand short-haul discount arm Transavia without pilot backing. Terner confirmed that Air France aims to hire about 500 new flight attendants for Boost by mid-2018. Jean-Marc Janaillac, De Juniac’s successor, said last month that the unit will start medium-length flights this year followed by long-haul operations next summer.<br/>