Kenya Airways Sinks Deeper Into Double Losses

Kenya Airways, once the Pride of Africa, and one that used to scale the skies with so much pride is deeply ailing with no hopes of recovering.

It is like Kenya Airways is in an economic Intensive Care Unit or even dead only that the mourners are still holding onto the body hoping it would resurrect.

Kenya Airways first sunk into a more than 27 billion shillings financial hole in losses, sending chills down the spines of both major and minor shareholders.

There have been efforts across the board to reduce the loss, which have been bearing fruits because, by 2018, the loss had been reduced by 90 percent.

The joy and the hope of seeing the airline out of the woods seem to have been short-lived as the airline, out of the blues doubled the losses for the half-year results for 2019.

Kenya Airways posted a pre-tax loss of 8.56 billion shillings in its 2019 half-year earnings for the period ending June 30th.

The current loss for the airline is more than double of what was registered at the same time in 2018 where the loss stood at 4 billion shillings.

The management at KQ has attributed the recent shocking loss to increased operational costs as well as impairment losses.

In 7 months alone, Kenya Airways lost 118 million shillings due to flight delays and cancellations.

The operational costs expanded by 10.9 billion shillings to 67.1 billion shillings. The airline increased its routes and flight frequency which is costing it as most of the flights are often half-empty, making them uneconomical.

Revenues made at the period stood at 2.3 billion shillings, similar to earnings accrued from new destinations.

The airline incurred a one-off impairment loss of 1.9 billion shillings as well as 1.5 billion shillings from a shift in accounting rules.

The National Assembly has already okayed the move to have Kenya Airways nationalized. This gave a go-ahead to the government, through the National Treasury, to buy 100 percent of shares from both major and minor shareholders.

Read Also: Kenyan MPs Have Voted To Allow The Government To Take Over Kenya Airways