Bluebird Aviation

Kenya’s Bluebird Aviation, a prominent charter airline founded in 1992, is at the center of an intense shareholder battle that has spilled into the country’s High Court. Originally launched to transport shipments of miraa (also known as khat) to Somalia, the company grew into a respected player in East Africa's aviation sector. Yet despite its success, internal strife between its founding shareholders has brought the company into a storm of legal disputes, financial controversies, and now, a court-ordered revaluation.

So, what exactly is fueling this ongoing shareholder row?

A Partnership That Turned Sour

Bluebird Aviation was founded by Adan Abid Yusuf along with three partners: former Kenya Air Force officers Hussein Farah and Hussein Mohammed, and pilot Mohammed Abdikadir. Each partner held a 25% stake in the airline. However, over the years, relations between Yusuf and the others soured, leading to a series of lawsuits and counter-accusations.

At the heart of the dispute was Yusuf’s claim that he had been sidelined and unfairly treated by the other shareholders. After lengthy litigation, the High Court ruled three years ago that Yusuf’s partners must buy out his 25% stake. But executing this order has proven far from straightforward.

A Controversial Valuation

The initial valuation of Yusuf’s shares, carried out by RSM (East Africa) Consulting Ltd, pegged the value at KES320 million (about USD2.3 million). The valuation took into account Bluebird’s assets — including its aircraft fleet, land, and buildings at Nairobi’s Wilson Airport — and financial performance over the preceding three years.

The agreed amount was deposited in a judiciary account, Yusuf's shares were transferred to Abdikadir, and, on paper, the matter seemed settled.

However, Yusuf soon challenged the valuation, alleging that the KES320 million figure was speculative and lacked transparency. Critically, the supporting financial documents — audited statements from 2017 to 2021 — were never provided to Yusuf alongside the valuation report. This lack of transparency became a major flashpoint, leading the court to intervene once again.

The High Court Steps In

Justice Njoki Mwangi of the Commercial Court division found merit in Yusuf’s claims. She ruled that the valuation lacked the necessary independence and transparency and ordered that a new valuation be conducted.

Key points from the judge’s directive include:

Appointment of a new valuer: All four parties must agree on an independent appraiser.

Adjustments based on the new valuation:

If the new valuation is lower than KES320 million, the airline will be refunded the difference from the money already deposited.

If the valuation is higher, the airline must top up the shortfall within seven days of the new report’s filing.

Cost burden: Yusuf will bear the cost of the new valuation.

Release of funds: Once the new valuation is accepted and filed, Yusuf’s advocate will receive the corresponding payment from the judiciary account within seven days.

This decision gives Yusuf another chance to argue for a fairer price for his shares — but it also opens the door to further complications, depending on the outcome of the new valuation.

What’s at Stake for Bluebird Aviation?

Bluebird Aviation currently operates a fleet of ten aircraft, mostly leased, including:

Four DHC-8-100s

One DHC-8-Q400

Three DHC-8-Q400(PF) freighters

Two Fokker 50s (F50s)

The company is an important player in East Africa’s charter and cargo aviation market. Ongoing shareholder disputes like this, however, can severely damage a company's reputation, delay strategic decisions, and unsettle clients and regulators alike.

The long-running feud could also affect staff morale and fleet management, especially since aircraft leases and operations depend heavily on the stability and financial health of an airline.

A Bigger Reflection: Challenges of Aviation Partnerships

The Bluebird Aviation case highlights a broader truth in the aviation industry: partnerships in complex, asset-heavy businesses like airlines can be incredibly fragile. Without clear, transparent agreements — and with shifting power dynamics — even initially solid partnerships can break down.

This saga serves as a reminder of the critical importance of:

Clear and transparent financial practices,

Independent valuations in shareholder buyouts,

Strong governance structures to prevent personal disputes from escalating into full-blown corporate crises.

For now, the future of Bluebird Aviation hinges on the next valuation — and whether it can finally put years of shareholder acrimony to rest.