"Huyo Mtu" ... Kwani?
Anyway, there is little benefit in GoK saving KQ with a 'loan' after KRA [with GoK's blessings] brings KQ down.

As an EXISTING shareholder you do not benefit from GoK (vs Opportunity Cost) in your business as a savior. To counter your KCB, "Huyo Mtu" refers you to KPLC. GoK hobbled KPLC by imposing managers [Samuel Gichuru], GoK departments not making payments, Rural Electrification and not allowing KPLC to recover its costs so leading it into bankruptcy.

GoK then lent KPLC money and converted some loans into Preference Shares which were then converted into Ordinary Shares with 51% ownership by GoK. Immediately after the Rights Issue, GoK refused a triennial rate increase which KPLC was due. And ma-shida for KPLC started.

KCB - GoK led it into bankruptcy but CBK 'saved' it to prevent a financial meltdown in Kenya. This was NOT a cash injection but CBK overlooked applying strict financial ratios.

After Kibaki came in, GoK repaid many of the loans even if these were misappropriated. Low savings rates in the early Kibaki years allowed KCB to make huge margins [Interest Spreads] to reduce their losses. Furthermore, KCB had to have 2 Rights Issues to right their capital inadequacies. And GoK has reduced its shareholding in KCB over the years.

Anyway... @obiero ... have fun I am staying out of KQ until Naikuni AND Mbugua leave. I will review my position in early 2015. And I am a pragmatist so if I see good things before 2015 then I might dip my toe in.

Leases are traditionally either operating leases or finance leases. The former shouldn't have VAT implications. The latter are like a loan, which I suspect attract VAT.
I think Brian Davis set up an offshore company called Simba something (fully owned by KQ) that bought the airbuses and leased them to KQ. This model eliminated the challenges now faced, I wonder if it was changed and why.

Meanwhile, the share has quietly bottomed out at 11.95 and is slowly starting out the safari as we approach FY13-14 accounts release next month.

The deep dislike for Naikuni is understandable, more so, for those who were caught out from the highs in share price. But the man had to do what was needed to ensure KQ lived to fight another day. If he chose to please shareholders short term, the company's future would be slightly more uncertain. The only way to survive was to grow the company.

Yes, there are things that could have been handled differently but growth was necessary. What is certain is, at the current share price the company is undervalued.

The painful memories of losing money on this share will not fade quickly but the price will eventually reflect the true value. When? is anyone's guess.

On a light note; Naikuni himself hinted(on mindspeak), that he might buy shares in KQ after his own departure as CEO. I guess he knew his strategy would not be good for the share price in the short term.

happy hunting and good luck

Would advise for a short term play to sell on or about results announcement day somewhere mid June.Expected profits should push the price beyond 13 so you are looking at a quick 10%.
Long term, airline industry is tricky and requires one with a thick skin.