LOSSES

Kenya Airways reports Sh5.9 billion net loss, revenues up

In Summary

• Even so, the total revenue for the year grew to Sh114.4 billion  compared to Sh80.7 billion in 2017.

CEO Sebastian Mikosz during the release of Kenya Airways results./COURTESY
CEO Sebastian Mikosz during the release of Kenya Airways results./COURTESY

Kenya Airways net  losses for the year ended December 2018 rose to Sh5.9 billion from Sh5.1 billion.  The loss before tax was Sh7.6b from Sh6.4b in 2017.

Even so, the total revenue for the year grew to Sh114.4 billion  compared to Sh80.7 billion in 2017 mainly boosted by growth in passenger revenue from Sh63.9 billion the previous year to Sh88.7 billion.  

The airline’s management defended the performance, stating that financial year 2018/19 covered 12 months compared to nine months the previous year.

"This therefore means that the 2018 results are not directly comparable with the 2017 results as it is a representative of 12 months against the 9 months in 2017," Chairman Michael Joseph said.

The Airline's chief executive Sebastian Mikosz  attributed the loss to high fuel, personnel and the cost of aircraft. 

''The three factors remain top  drivers of airline costs contributing to about two thirds of total cost. Of these costs fuel remains the most volatile and most airlines continue to hedge fuel prices to protect themselves from the volatility,'' Mikosz said.

He said that the firm has a dedicated team looking at multiple solutions to cushion the airline against the shock of potential further rise in fuel cost and forex volatility in 2019.

He pointed out that while the drop in the oil price during the fourth quarter of 2018 gave airlines a slight reprieve, there is concern that they will rise again.

''We are very optimistic that the turnaround strategies we have employed will deliver results.” Mikosz added.

KQ, as the airline is known by its international code saw its current liabilities exceed current assets by 106.42 billion compared to Sh101.5 billion the previous financial year.

EThis is a setback to the airline’s progress; having narrowed its net losses by 28.8 per cent to Sh4 billion in the half year ended June on the back of cost-cutting measures and revenue growth.