National carrier Kenya Airways (KQ) has registered a Ksh. 14.33 billion loss in the first six months of the year, a 67.3 percent increase on the Ksh. 8.6 billion loss it posted in a similar period in 2019.
The loss posted by the in the red company in the first half of the year exceeds the annual losses that the airline has posted in the past three years. In the year ended December 2019, the airline posted a net loss of Ksh. 12.99 billion up from Ksh. 7.55 billion in 2018. In 2017 the airline’s net loss stood at Ksh. 10.21 billion.
The airline has attributed the poor performance to a struggling aviation industry that has felt the effects of the coronavirus which has disrupted international flights and cut down customer spending. The airline’s passenger volume decreased by 55.5 percent in the period to 1.1 million as opposed to 2.4 million in a similar period in 2019.
“Operations were severely impacted by the Covid-19 crisis resulting in depressed half-year results. 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,” said KQ chairman Michael Joseph in a statement.
Despite the resumption of domestic and international flights in and out of the country, Mr. Joseph was adamant that the airline’s fortunes in the second half of the year would be more or less the same.
“The 2020 results will be significantly negatively impacted because of the projected suppressed air travel demand. We project the demand to remain at less than 50 percent of 2019 for the rest of the year,” said Mr. Joseph.
KQ’s total revenue in the period under review fell by 48 percent to Ksh.30.21 billion fueled by the fall in passenger numbers. Operating costs also declined by 37 percent to Ksh.38.6 billion mainly driven by the reduced operations for the year.
Following the confirmation of the first coronavirus case in the country on March 13, President Uhuru Kenyatta’s regime halted domestic and international travel in an effort to contain the spreading of the virus.
The move by the regime affected KQ’s revenue streams with passenger revenue dropping by 53 percent to Ksh. 20.23 billion as a result of flight cancellation.
KQ responded to the Covid-19 adversities through layoffs and massive salary cuts to reduce the pressure on the bottom-line.
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