National carrier Kenya Airways has posted a net loss of Sh. 21.7 billion in the first six months of 2023.
This was a huge increase from the Sh. 9.9 billion net loss the airline recorded in the same period the previous year.
Nonetheless, the national carrier recorded a 56 per cent increase in revenues to Sh. 75 billion. However, these gains were wiped out by costs which increased by 67 per cent to Sh. 96.8 billion.
This increase was largely attributed to Sh. 22 billion finance costs and Sh. 7.4 billion fuel costs.
At the same time, KQ suffered a Sh. 17 billion impact on foreign exchange losses on monetary items, loans and leases.
According to Kenya Airways chief executive officer Allan Kilavuka, the legacy debt and the devaluation of the Kenya shilling against major currencies are two of the main issues 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,” said Kilavuka.
“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 cebt.”
In the period under review, KQ generated record revenues of Sh. 75 billion recording a 56 per cent increase compared to the same period last year.
“This increase is mainly attributed to a significant growth in passenger revenue which grew by 80 per cent,”said Kenya Airways Group Chief Finance Officer, Hellen Mathuka.
“We uplifted a total of 2.3 million passengers during the period, a 43 per cent improvement compared to the prior year’s 1.6 million passengers.”
Kenya Airways however posted its first profit in six years at an operational level. This came as the carrier’s revenues surpassed operational costs to make Sh. 998 million in operational profits.
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“Operating results show the company is viable. For the first time in six years we have made an operating profit, which is clearly a testament of the hard work we put in to turn around this airline,” Kilavuka said.
The recorded operating profit of Sh. 998 million in the first half of 2023 was 120 per cent improvement from a loss of Sh. 5 billion that was reported for the same period in 2022.
“Our focus looking ahead is on recapitalizing the business with the aim of placing Kenya Airways on a stronger footing and providing a stable base for long-term growth,” said Kilavuka.
“We will continue focusing on our network expansion and fleet optimization to increase our passenger and cargo capacities. Further, we see a promising trend in forward bookings for the second half of the on year.”
