KQ plunges into further loss to record Ksh.11.5 billion in first half of 2021
National carrier Kenya Airways (KQ) losses dropped from Ksh.14. 4 billion to Ksh.11.5 billion in the first half of 2021.
The airline attributed the improvement in its loss position to lower consumption of fuel due to fewer flights, reduction in fleet ownership costs following negotiations with aircraft owners who lease planes to KQ as well as a drop in operating cost over the six months.
The losses are despite KQ’s cargo business posting growth.
In the period under review, the airline’s revenues dropped to Ksh.27.35 billion as a result of COVID-19 compared to Ksh.30.21 billion registered during a similar period last year.
According to the carrier’s chief executive Allan Kilavuka, the airline’s foothold in travel within Africa remained largely subdued on account of travel restrictions against the pandemic.
This coupled with the slow deployment of vaccines in the majority of African countries including Kenya who so far has vaccinated just about two percent of the total population continue to deter travelers to the continent.
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“People coming into this region are hesitant especially because of the dull vaccine rollout. This is going to impact us now and also in the future. These constraints and resections are a major challenge for us,” said Kilavuka.
Further, the United Kingdom (UK) red listing Kenya also affected the airline significantly with traffic for Kenya airways on the route declining 87 percent over the period under review in addition to reduced trips to China from daily to just weekly.
In light of the challenges affecting the European market, the airline reported a 94 percent drop in passengers to the European Union (E.U)
KQ’s cargo revenues went up 6o percent as the airline focused on freighter operations even as the airline targets more growth in the short term as well as transporting COVID-19 vaccines within Africa.
“Cargo has been contributing about 10 percent to our revenues but we want to increase this to over 20 percent in the coming years. Repurposing two Dreamliners has helped grow the cargo we can ferry to 500 tonnes per month,” said Kilavuka.
The airline has narrowed its losses compared to last year’s when it trippled losses in its pretax profit to record Ksh. 36.573 billion.
In 2019, KQ lost Ksh.12.9 billion when Kilavuka attributed the loss to the coronavirus pandemic.