Kenya Airways cut its losses from 38.3 billion to Sh22.7 billion in year ended December 31, 2023.
The 41 percent drop signifies continuing efforts aimed at steering the national career back to a recovery path.
The airline in its financial result released on Tuesday, attributed the continued loos to mainly forex exchange losses posted during the review period.
Kenya Airways Chief Executive Allan Kilavuka pegged the 2023 loss to forex fluctuation despite having increased flight frequencies by 24 percent and a capacity increase of 44 percent.
He said despite the unexpected foreign exchange losses and higher operating costs, the airline managed to achieve positive results in some areas.
“In our projections we had anticipated a loss of Sh27 billion. If the variance of the shilling would have been stable we would have posted a profit of about a billion or so,” said Kilavuka.
The airlines total Income saw a 53 percent rise from Sh116.8 billion in the last financial year to Sh178.5 billion in 2023.
Head of Internal Audit Hellen Mwariri said the revenue growth is a positive sign and reflects increased passenger numbers and improved revenue streams.
Operating costs rose to Sh167 billion from Sh122.4, representing a 37.2 percent increase in running expenses
Despite the higher operating costs, Kenya Airways achieved an operating profit of 10.5 billion Kenyan shillings, marking a significant turnaround from the previous year's operating loss of 5.6 billion Kenyan shillings.
On the financial front, Kenya Airways reported a two percent increase in finance costs, totalling Sh33.6 billion attributed to interest payments on loans or other financial obligations.
“Interest loan repayment and funding of lease obligations are the major concerns facing the airline currently,” said Mwariri.
Kilavuka said the airline has renegotiated some of these costs and is working to further bring them down in line with its 2024 projections.
A notable aspect highlighted in the firm’s financials is that the airline did not receive any loans from the government during the year 2023 financial year.
This indicates that the airline managed its financial operations without relying on additional government support.
“In 2023 we didn’t get any allocation from Treasury but they are supporting us to restructure some of our debt. In the period Sh19.2 billion was directed to loan repayments,” said Kilavuka.
In December 2023 the National Treasury had paid Sh2.7 billion in KQ guaranteed debt in the three months to the end of September after taking over the burden from the national carrier.
The repayments in the quarter included Sh2.37 billion for principal repayments and Sh351.29 million for interest payments, according to data from the Controller of Budget (COB).
The fresh instalment brought the cumulative exchequer payments on the KQ guaranteed debt to Sh13.35 billion with the first payment having been done in the quarter ending in December 2022.
Despite the overall improvement, the airline still faces challenges in turning a net profit after accounting for all expenses and tax obligations.
The year under review has seen Kenya Airways achieve its first operating profit in seven years, which is a significant milestone.
