Kenya Airways half-year loss widens 67pc to Sh14bn on Covid-19 woes
What you need to know:
Kenya Airways posted Sh14.33 billion loss on account of Covid-19 disruptions that led to grounding of flights.
The half-year loss is more than the annual losses that KQ has been posting for the last three years.
KQ chairman Michael Joseph has offered a bleak outlook on the remainder of the year despite domestic and international flights having resumed.
Dar es Salaam. Net losses for the Kenyan national carrier Kenya Airways (KQ) rose by 67.3 percent in the first-half of 2020, due to the adverse impact of the viral Covid-19 pandemic on air transport.
Kenya Airways - whose trading activities are currently suspended at the Dar es Salaam Stock Exchange (DSE) - stated that its net loss for the six months that ended on June 30, 2020 rose to KSh14.35 billion, from the Ksh8.5 billion recorded in a similar period in 2019.
“Operations were severely impacted by the Covid-19 crisis resulting in depressed half year results,” said KQ chairman Michael Joseph in a report issued at the local bourse.
The airline recorded a 55.5 percent reduction in passenger numbers to hit a low of 1.1 million passengers during the period compared to 2.4 million passengers over the same period last year.
As a result, flight passenger revenues dipped by 53 percent to Ksh20.2 billion, the summary of the unaudited group results for the period ended June 30, revealed.
“The network activity from April to June was minimal due to travel restrictions and lockdowns effectively reducing operations to almost nil in connecting our home market to key cities,” the report reads in part.
However, according to the company’s document, efforts were put in place to ensure more cash was preserved.
“The Group saw a decline of 37 percent in total operating costs, mainly driven by the reduced operations for the year. Of the total operating costs, direct operating costs declined by 48.8 percent whereas fixed costs declined by 12.6 percent,” KQ chairman Joseph said.
He also said that KQ’s focus is now on cash preservation to help navigate through the difficult period that has seen global airlines run into massive losses.
“These initiatives included moratorium on loans, deferment of lease rentals, payment plans with suppliers and partial deferment of staff salaries,” he said.
The company has also exploited opportunities of raising much needed revenue through cargo charters and passenger repatriation flights.
