Kenya Airways has recorded Ksh22 billion loss before tax for the half-year of 2023, majorly attributed to the impact of weakening Kenya Shilling.
Allan Kilavuka, Kenya Airways Group Managing Director and CEO 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,” he said.
“The devaluation of the Kenya shilling has a significant negative impact on our financials as a majority of our transactions are carried out in the major foreign currencies. This has, in turn, an impact on our overhead costs, which have increased by 22 per cent.” said Kilavuka.
The Kenya shilling has since lost at least 15pc of its value, exchanging at Ksh 145.15 against the dollar by close of trading Tuesday.
In the 2023 Half Year results reported, the Group’s revenue grew to Sh75 billion, recording a 56 per cent increase compared to the same period last year. The operating improvement was underpinned by a growth in the cabin factor to 76.1 per cent, with an increase in passenger numbers of 43 per cent to 2.3 million.
During this 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. Other initiatives undertaken by the management include partnerships with other airlines, lease rentals renegotiations and other cost-reduction measures.
Speaking at the investor briefing event, Kenya Airways Chairman Michael Joseph said, “These figures 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.”
According to IATA’s May 2023 passenger polling data, the future for the airline industry seems optimistic. Kilavuka said the airline 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. 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 Kilavuka.
Kenya Airways’ KAA Debt Rise to KES 4.6 Billion – Kenyan Wallstreet
