•The Airlines troubles more than doubled compared to a similar period in 2022 when the losses stood at Sh9.9 billion.
• Passenger numbers increased by 43 percent to 2.3million with an increase of 56 percent in Available Seat Kilometres (ASKs).
Image: /COURTESY
A Sh17 billion impact on foreign exchange losses on monetary items, loans and leases, has sunk Kenya Airways into a loss of Sh21.7 billion in the six months to June 2023.
The airline's troubles more than doubled compared to a similar period in 2022 when the losses stood at Sh9.9 billion.
A return to an operating profit of Sh998 million, from a loss of Sh5 billion reported in a similar period last year did less to cushion the airline as the depreciation of the shilling hit its performance.
Kenya Airways CEO Allan Kilavuka, said the legacy debt and the devaluation of the Kenya shillings against major currencies are two concerns that continue to hold back the airline.
"We are working to resolve the issue of the legacy debt in collaboration with our stakeholders and the Kenyan government. The debt is worsened by the 14 per cent devaluation of the Kenyan shilling against the dollar since January, which we have had to book as foreign exchange losses,” said Kilavuka.
He pointed out that the devaluation of the Kenya shilling has a significant negative impact on the airline's financials as a majority of transactions are carried out in the major foreign currencies.
This has, in turn, impacted KQ's overhead costs, which increased by 22 per cent.
Kilavuka, however, maintained that The results confirm the operational viability of the airline.
According to IATA's May 2023 passenger polling data, the future for the airline industry seems optimistic. Kenya Airways will continue to focus on recovery by implementing turnaround initiatives.
"Our focus looking ahead is on recapitalizing the business to place Kenya Airways on a stronger footing and provide a stable base for long-term growth. We will continue focusing on our network expansion and fleet optimization to increase passenger and cargo capacities,” added Kilavuka.
According to the firm, in the period under review passenger numbers increased by 43 percent to 2.3million with an increase of 56 percent in Available Seat Kilometres (ASKs).
Further, we see a promising trend in forward bookings for the year's second half. It all starts with a robust summer peak, particularly in July and August, where our load factors exceed last year's," said Mr Kilavuka.
Kenya Airways Chairman Michael Joseph said, that during the period, the company mainly focused on improving the customer experience, operational excellence, and cash conservation.
The airline also exploited opportunities to raise much-needed revenue through passenger charters and ramped up scheduled operations.
"These figures underscore the airline's performance during the period and offer encouraging indications of ongoing recovery and turnaround initiatives that have been put in place by management to return the airline to profitability are bearing fruit," said Michael Joseph.
He added that other initiatives undertaken by the management include partnerships with other airlines, lease rental renegotiations and other cost-reduction measures.