Kenya Airways half-year loss nearly doubles to Ksh.14.3 billion
Kenya Airways (KQ) has announced a 66 per cent expansion of its half year loss to Ksh.14.3 billion from Ksh.8.6 billion last year.
The airline’s deteriorating performance was on the back of reduced revenues booked in the period from reduced operations that followed the advent of the COVID-19 pandemic.
Total revenues booked in the period reduced by 48 per cent to Ksh.30.2 billion from Ksh.58.6 billion as passenger flights were frozen in the second quarter of the year as part of mitigation measures to contain the pandemic.
“During the first half of 2020, 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 lock downs effectively reducing operations to almost nil in connecting our home market to key cities. Measures were put in place to preserve cash including cost savings measures and reduced activity for employees,” noted Kenya Airways Chairman Michael Joseph.
Kenya Airways says it recorded a 55.5 per cent reduction in passenger numbers which hit a low 1.1 million compared to 2.4 million passengers last year.
Subsequently, income from passenger revenues declined by 53 per cent to Ksh.20.2 billion as the capacity deployed shrunk.
KQ however saw a 37 per cent decline in costs to Ksh.38.6 billion driven largely by the reduced operations with direct costs halving by 48.8 per cent while fixed costs cooled by 12.6 per cent.
The lower costs saw the group’s operating loss margin shrink by 22.9 points to 27.8 per cent.
The airline says it is remained focused on cash conservation including seeking for moratoriums on debt servicing, deferment of rent leases and payment plans with suppliers.
Further, the company says it continues exploiting opportunities to raise revenue through cargo charters and passenger repatriation flights.
“Faced with long recovery prospects, diminishing revenue occasioned by reduced demand in passenger business and increased costs due to tighter health and safety measures, the business focus for the rest of 2020 will be ensuring the survival and rebound the company,” added Mr. Joseph.
The airline expects its full year results to be significantly affected by suppressed air travel demand which it sees remaining at less than 50 per cent from 2019 for the rest of the year