Last week, Kenya’s state-owned airline and one of Africa’s leading airlines posted the largest loss any company in East and Central Africa has ever recorded in the history of corporate earnings in the region.

Kenya Airways, which has recorded losses for the last three years, posted  a $294 million pre-tax loss in the financial year ended March, driven down by what management say were a series of factors ranging from tourism slump in the east African nation to poor fuel hedging decisions..

Debate is now raging on as to what needs to be done to save the African carrier. Figure of how much will need to be injected into Kenya Airways to keep it afloat have been thrown around.

The country’s Cabinet Secretary for Treasury, Henry Rotich, told Reuters the airline may need a $500-$600 million bailout, while Nairobi-based Standard Investment Bank (SIB) put the bailout figure at $100 million.

SIB also said the airline, that has been spending heavily on new planes, will also need to significantly scale down its operations in order to cut costs and return to profitability.

“The key is to reduce the debt burden as much as possible. The company also needs to take some tough decisions and become a smaller airline,” Eric Musau, a research analyst at SIB, told The Monitor.

In anticipation of the poor full-year performance announcement, Kenya Airways in June hired a New York-based turnaround consultant Seabury to help it restructure its operation and lift it from a string loss making years.

In October last year, the company picked a consortium of global financial firms to help restructure its expensive short-term debt and secure longer-term funds in the form of debt, equity or both.

It has also picked Cairo-based African Export-Import Bank (Afriximbank) to advise it on a capital raising plan and arrange a $200 million bridging loan, Reuters reported.

“This report is not yet out and as soon as we get it and we interrogate it and we feel comfortable with it, then we will know the actual numbers that the experts recommend,” Rotich told Reuters.

In a later debate on Citizen TV, Rotich said he did not expect lenders to inject significant long-term debt in the carrier with its currently tattered books, and the government and other major shareholders, including Air France-KLM, may need to come up with other alternatives, including increasing local taxes.