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Kenya Airways will raise capital for expansion

To meet its expansion expenses Kenya Airways will soon be revising its capital. The airline did not mention the details of the revised capital but clearly showed its intensions to raise capital to meet the finances for the future growth and expansion plans.

According to few analysts the airline has been under the pressure to raise the capital for a higher wage bill and fuel.

According to the rising oil price investors and traders the airline shares have been hit by KES 40.25, which is a 13-month low.

Although no details have been mentioned on how to meet the targets the airline did mentioned that CFC Stanbic Bank will act as its financial advisor. The airline also revealed last November that rose to KES 41.21 billion shillings from KES 33.5 Billion last year, thus resulting into the pretax profit of KES 2.05 billion shillings.

Some analysts believe that the aggressive expansion of the airline over the new African routes could surprise some investors.

Samuel Gichohi, a senior analyst at NIC Securities, said, "The airline industry is a cost-intensive industry and expansion means that KQ's (Kenya Airways) capital reserves are under pressure as they will need more planes, an increased wage bill and fuel costs."