Kenya Airways will get additional state support of KES34.9b (US$283.2m) to help the cash-strapped national carrier meet overdue payments of KES24b (US$194m), including to lessors, operations, and maintenance. This has emerged from a letter of intent sent on December 7, 2022, to International Monetary Fund Managing Director Kristalina Georgieva by Kenya's National Treasury & Planning Cabinet Secretary Njuguna Ndung'u and Central Bank of Kenya Governor Patrick Njoroge. The letter is contained in the IMF's December 2022 status update on Kenya, declaring it had completed its fourth review of extended fund and extended credit facilities for Kenya providing a US$447.39m disbursement. From it, it emerges that Kenya Airways remains insolvent with the highest cost base among regional airlines, even as it met 75% of its targeted cost reduction in FY2021/22.<br/>
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Garuda Indonesia hopes to resume trading in its shares after issuing around $80m in Islamic bonds this week, the CEO of the country's flagship airline said on Tuesday. The Indonesia Stock Exchange suspended trading in the state airline's stock in June last year, after the company defaulted on coupon payments for a $500m Islamic bond, or sukuk. Garuda's troubles were long in the making, but worsened as the COVID-19 pandemic hammered the industry, bringing air travel and tourism to a virtual standstill. Garuda shares last traded at 222 rupiah, far below the issue's IPO price when the airline went public in 2011 at 750 rupiah per share. The new Islamic bond issue, which CEO Irfan Setiaputra said is a requirement for lifting the share trading freeze, is scheduled to take place Wednesday. "We hope that [prerequisite to lifting the suspension] can be completed in the next few days and that it can be lifted before the end of this year," Setiaputra said. In September 2019, before the pandemic, Garuda flew to about two dozen countries, in addition to operating domestic routes. However, like other airlines worldwide, the company was hit hard by the pandemic, which drastically reduced air travel. In June, Garuda received approval from more than two-thirds of its creditors for a make-or-break restructuring proposal that staved off bankruptcy for the airline, which has been flying since 1949. Among the steps Garuda has touted to revive its fortunes, the CEO mentioned that it will focus on operating as a full-service carrier as well as domestic routes. For international routes, he said the company will concentrate on those that are highly profitable. "Garuda's future business model will prioritize three things to become a simpler, more profitable company, and focus on full service," Setiaputra said.<br/>