National Carrier Kenya Airways (KQ) has posted a Ksh12.9 billion loss in the year ended December 2019.
This is a 71 percent increase in loss as compared to Ksh7.6 billion loss posted in the year ended December 2018.
In a statement, KQ said the total revenue for the group increased by 12.4 percent from Ksh114 billion in 2018 to Ksh128 billion last year.
“The growth was due to improved passenger, cargo, ancillaries, and other revenue streams, mainly due to expansion of the Kenya Airways network,” the airline’s chairman Michael Joseph said.
In the year under review, KQ launched new routes to Geneva, Rome, and Malindi, resulting into a 6.7 percent increase in passenger numbers hitting 5.1 million passengers. As a result, passenger revenue grew by 8.9 percent.
Cargo tonnage grew by 6.3 percent from 64,238 tonnes to 68,264 tonnes.
Read: Not Yet Out of the Woods For KQ As Gov’t Ignores Plea For Bailout
Despite the growth in numbers, operating costs grew by 12.4 percent from Ksh114.8 billion to Ksh129.1 billion.
“The Airline benefitted from the reduced global fuel prices and maintained low fuel costs through its hedging program,” added Joseph in the statement.
The bad news comes at a time when the carrier has grounded most of its planes for over two months now due to Covid-19 pandemic.
“The crisis has significantly affected economies around the world and the aviation sector in particular. We estimate that it will take at least a year to gain the confidence of the travellers and start recovering the travel demand,” Mr Joseph said.
Earlier on, the government refused to allocate the carrier Ksh7 billion bailout to help it out through the crisis.
Read: Kenya Gifts Ethiopian Airlines With Cargo Deal At The Expense Of Cash Strapped KQ
The government says that the troubles bedeviling the carrier are beyond Covid-19 pandemic, which was cited as one of the reasons for its financial woes.
KQ was seeking for the funds to help pay workers, service the grounded planes and pay utility bills such as water, electricity, parking fees among others.
KQ has grounded its fleet of planes since the country suspended international flights,adding to its financial troubles which existed even before Covid-19.
Treasury Cabinet secretary Ukur Yatani now says that the government is focused on nationalising the carrier as a long term solution for KQ.
Read: KQ Employees Sent On Unpaid Leave As Coronavirus Effects Hit
“We are not making any commitments at this stage. Kenya Airways need to remain afloat but it is also important to look at structural challenges because what is happening now is more than the business environment,” said Yatani.
Under the nationalisation plan, KQ will be a subsidiary of an aviation company alongside Jomo Kenyatta International Airport, an aviation college and Kenya Airports Authority, which will operate all other airports.
Email your news TIPS to Editor@kahawatungu.com or WhatsApp +254707482874. You can also find us on Telegram through www.t.me/kahawatungu
Email your news TIPS to Editor@Kahawatungu.com — this is our only official communication channel
