KQ’s US direct flights: The struggle that Kenya Airways is having in running the highly publicised direct flights to US have come to light.
This is after the national carrier’s chief executive officer admitted that the direct Nairobi-New York route is not lucrative.
“I do not consider it to be a lucrative route. There is nothing lucrative about flying to New York,” the CEO said.
However, the CEO said that while the route remains difficult and unprofitable, it is necessary for KQ’s position in the market. “The route is necessary but difficult. It is performing in the range that we expected. It is feeding our African network. It positions us differently,” he said. KQ’s US direct flights, which were launched in October last year, are to date the most marketed route since Kenya Airways began its turnaround plan. The flights now offer the fastest connection from East Africa to New York City.
This revelation came as Kenya Airways returned a full year loss of Sh. 7.55 billion for the financial year ended December 2018. This loss represented an increase of 17.76 per cent.
In the financial full year 2017, the national carrier made a full year loss of Sh. 6.41 billion. This latest loss has dimmed hopes of the national airline becoming profitable in the near future. It also dents the on-going efforts that are aimed at helping the carrier recover.
During the financial year, the company’s revenue rose sharply by 41.32 percent largely driven by more passenger bookings to Sh. 114.18 billion from Sh. 80.7 billion a year earlier.
KQ’s total operating costs also jumped 43.96 percent to Sh. 114.8 billion from Sh. 79.7 billion in the previous financial year.
In a statement, the airline attributed the loss to volatile fuel prices, which saw its costs rise by 73.6 per cent from Sh19 billion incurred in the 9-month period in 2017 to Sh33 billion in the full year ended in December 2018.
“I would like to highlight some changes to our financial reporting. Following the Directors resolution in 2017 to change the Group’s year-end from March 31 to December 31, the 2018 financial statements cover a twelve-month period from January 1 to December 31, 2018, while the financial statements for 2017 cover a nine-month period from April 1 to December 2017,” said Michael Joseph, Chairman Kenya Airways.
