Kenya Airways records pretax loss of Ksh.36.57 billion
The national carrier, Kenya Airways (KQ) plunged into a pretax loss of Ksh. 36.573 billion in 2020.
The loss is nearly triple the previous year’s loss of Ksh.12.9 billion, KQ Chief executive Officer Allan Kilavuka has attributed the loss to the coronavirus pandemic.
“Since the start of the year, coronavirus has devastated the aviation and travel market, causing consistent and severe capacity cuts week after week. Globally, overall capacity is down nearly 50 million seats which is over 47 percent,” said the airline.
Upon the advent of the novel coronavirus pandemic, KQ suspended all of its international flights effective March 25 to curb the spread of the virus.
“March 2020, was the worst year in aviation history. Airline passenger traffic reduced to levels last seen in 1999 resulting in 21yrs of traffic growth being wiped out in just 1yr following the Government directive to suspend all passenger services to curb the spread of Coronavirus.”
Kenya Airways received a Ksh.5 billion commercial loan from the Treasury in late February last year to fund its fleet engines overhaul and maintenance as well as to finance day-to-day operations for the loss-making airline.
This underlines the airline’s overreliance on Treasury-backed loans and financing.
KQ also asked the Treasury for a Ksh.7 billion emergency bailout in May last year after its aircraft were grounded.
In 2019, Kenya Airways underwent a series of capital and debt restructuring that elevated taxpayers to the biggest shareholders of the financially troubled carrier.
Impact of COVID-19 on aviation sector
Aviation-supported jobs potentially fall by 46 million to 41.7 million (-52.5%)
Direct aviation jobs (at airlines, airports, manufacturers and air traffic management) fall by 4.8 million (a 43% reduction compared with pre-COVID situation)
Nearly 39,200 special repatriation flights took nearly 5.4 million citizens home after borders closed in March 2020
Nearly 46,400 special cargo flights transported 1.5 million tonnes of cargo, mostly medical equipment, to areas in need during the height of the pandemic response.
This is according to International Air Transport Association (IATA).