Kenya Airways might lose more than Ksh 70 billion this year
Kenya Airways might lose more than Ksh 70 billion this year as the national carrier sees a drop in revenues of between 60 billion Kenyan shillings and 70 billion shillings after posting a wider first-half pretax loss.
National Carrier Kenya Airways says it may lose up to Sh70 billion or more in 2020, compared to the Sh12.98 billion losses it recorded in the 2019 financial year.
This is an upward revision from the Sh50 billion it had projected as of June.
Kenya Airways Chief Executive Officer Allan Kilavuka said the forecast has been influenced by disruptions caused by COVID-19.
“We kept on revising the dates on when we expected to resume our flight operations and we are also witnessing some extra restrictions like flying to Europe and London that is affecting our revenue,” said Kilavuka.
Kilavuka was speaking during the release of the company’s half-year results where it reported losses of up to Sh14.3 billion in the first half of the year.
The company’s Chief Financial Officer Hellen Mwariri pegged the losses on reduced passenger traffic the airline has witnessed since the outbreak of the coronavirus disease.
“The company has continued to see a slow uptake in passenger traffic since many countries across the world shut its borders in order to curb the spread of the coronavirus pandemic,” said Mwariri.
Total revenues dropped by 48 percent to Sh30.2 billion from Sh58.6 billion impacted by the drop-in passenger numbers from 2.4 million in 2019 to 1.1 million in the first 6 months ending June 30.
The loss-making airline witnessed a 37 percent decline in costs to Sh38.6 billion on reduced operations.
“We are working to see efficiency, lower fixed costs, maximizing on our digital platforms, and also exploring our cargo platforms for recovery that might start in 2022 and where we see a full recovery in 2024,” Kilavuka added.
KQ is currently in talks with the government to receive support in order to remain afloat.
The company also hopes to return to profitability by 2024.
“We are still in discussion with the government on how much they can give us, we need a lot of money but we will not get all that we want because of the demand arising from the health sector,” board Chair Michael Joseph said, adding that he could not reveal how much money they had received so far.