The Standard quoted a section of Pakistani media (Abb Tak Tv) about Pakistan International
Airlines (PIA) - the national carrier; having finalized plans to take over, on same lease terms,
three planes from Kenya Airways. At the same time, a classified report seen by The Standard
and presented to the Pakistan's Ministry of Finance showed that PIA is considering the deal,
which will see the airline lease the three planes for a period of six years. Loss-making Kenya
Airways, partly owned by Air France-KLM, had recently announced that it was selling its
assets, among them seven aircraft and a parcel of land in Embakasi as it negotiates for a loan
from Afreximbank to rescue it from the cash crisis. The Pakistan government is preparing to
privatize the national carrier (itself loss making), and the strategic plan to lease the planes is seen as an attempt to restructure its operations and boost its value ahead of a planned
privatization. The Pakistan government is said to be injecting close to USD 30m every month
into the ailing airline. Kenya’s Finance Cabinet Secretary, Henry Rotich, estimates that Kenya
Airways will require approximately KES 60.6bn (USD 600m) bailout. We view the decision to
reduce capacity as a positive step that will enable Kenya Airways raise its load factors thus
have a better chance of survival when it eventually receives the proposed funds. (The
Standard, Standard Investment Bank)
There are only two emotions in the stock market, fear and hope. The problem is, you hope when you should fear and fear when you should hope