National carrier Kenya Airways’ (KQ) accumulated losses over the years have hit Ksh127 billion, following a six-month loss of Ksh11.5 billion announced yesterday.
The loss was 19.6 percent lower as compared to a wider loss of Ksh.14.4 billion last year.
KQ’s total operating costs were reduced by 10.4 percent to Ksh34.6 billion from Ksh38.6 billion, while Ksh784 million was saved in fuel costs from reduced capacity deployment.
Negotiations on fleet ownership saw the carrier save Ksh1.5 billion while net financing costs fell by Ksh1.6 billion.
The carrier saved Ksh155 million from its workforce reduction and payroll cuts which were implemented earlier in 2020.
KQ’s revenues shrunk by nine percent to Ksh27.4 billion with passenger revenues alone falling by Ksh3.5 billion. Freight revenues improved by Ksh2.7 billion from cargo-centered initiatives including the conversion of two Boeing 787 craft into fully-fledged freight operators, adding over 500 tons of cargo capacity monthly.
“The activation in terms of driving costs down is much more than our reduction in revenues even within the constraints. As management, we have been working extremely hard to keep costs down and conserve cash,” said KQ CEO Allan Kivaluka.
KQ is now seeking financial support from its principals including the government which makes for its majority shareholder.
“The financial situation of the company is precarious. We have a negative equity position which means we are insolvent. Definitely, the company is in need of financial support, this is not a secret as I have mentioned before,” added Mr. Kilavuka.
Currently, KQ has negative equity of Ksh73.8 billion from Ksh64.2 billion in June 2020.