Kenya Airways market value down 38.2% year-to-date

Kenya’s national airline has been struggling to stay out of the loss-making territory for the past seven years. In less than three months, the airline has lost close to 40 per cent of its market value. Several attempts to boost its operations have not borne fruit.

Last month, the airline’s plan to take over operations at JKIA, Kenya’s largest airport, suffered a setback after parliamentarians stopped the process claiming that the loss making carrier cannot take over a profitable business. By taking over operations at Jomo Kenyatta International Airport, KQ aimed to enhance its operations and to gain competitive advantage against regional airlines.

KQ’s Chief Executive Officer Sebastian Mikosz told the East African Newspaper that the only way for the airline to return to profitability is by taking over the management of JKIA. “There is actually no way KQ can be profitable in its current state,” said the CEO.

The airline has also had challenges with its employees who regularly gone on strike. The workers demand for better pay and improved working conditions. Additionally, they are opposed to KQ’s cost-cutting strategy of outsourcing staff.

Kenya’s airline faces intense competition from Africa’s leading air carrier, Ethiopian airlines, as well as other Middle Eastern operators who charge less airfare compared to what Kenya airways charges. The national carrier hopes to get approval to operate JKIA so as to compete fairly with its rivals.