Kenya Airways (KQ) management estimates that the airline could lose up to KSh50 billion by the end of the year. Speaking during yesterday’s 44th Annual General Meeting, CEO Allan Kilavuka said that the airline has already lost over KSh10 billion since January.
“We don’t have the full picture of how much we have lost, but our estimates are since January to date we have probably lost in terms of revenue in excess of $100 million. When we estimate to the end of the year, we will lose between $400 million and $500 million. This is unprecedented but that is what we are projecting.”
CEO Allan Kilavuka
The airline is taking blows from shrunken revenues due to suspended international travel since the onset of the coronavirus in Kenya. Passenger services account for the bigger part of the airline’s revenues. KQ Board Chair Michael Joseph expressed worry that the mounting losses threaten the airline’s going concern. Joseph asked for the airline to be allowed to fly as soon as possible to mitigate the losses.
“Even at a reduced level, commercial flights would help us a lot. Our plea is to be allowed to open the skies as soon as possible so we can start earning revenue…,” Joseph said.
Kenya Airways Banks on Cargo to Rescue Revenue
The airline is relying on the cargo business to fill in the gap in revenue. Currently, KQ is ferrying cargo to China, London, Sharjah, and Amsterdam.
“We have had consistent flights to china, specifically to carry Personal Protective Equipment (PPEs). We’ve also had repatriation flights to London, where we use the belly to carry cargo. We’ve started doing weekly flights to Sharjah in the UAE, ” Kilavuka added.
On average, the airline transports approximately 3,000 tonnes of cargo a week, which fluctuates with demand. Nevertheless, the airline is experiencing an uptick in cargo, recording 23 rotations last week.
Kenya Airways also halted plans to expand to new routes, until at least 2023, given its financial situation.
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