Deep cost-cutting helped Kenya Airways reduce its full-year net loss by more than half to Sh10.2 billion ($96m), showing some green shoots of hope for the national carrier, which is however beset by a flagging topline and wider erosion of shareholders’ capital.
KQ, as the carrier is known by its international code, on Thursday reported a 60.9 per cent drop in its net loss for the 12 months ended March from last year’s Sh26.2 billion ($253m).
The apparent upturn was, however, dampened by a Sh10 billion shrinkage in its turnover to Sh106 billion, while the airline’s book value sank Sh9.2 billion more into the negative to Sh44.9 billion, reflecting erosion by years of losses and negative fluctuations on the carrier’s mountain of foreign currency denominated loans.
“Our operating costs reduced significantly due to the turnaround efforts. We posted an operating profit of nearly Sh900 million compared to a Sh4.1 billion loss last year,” KQ chief executive, Mbuvi Ngunze, said when releasing the results.
Operating costs dropped by Sh14.9 billion to Sh105.4 billion, with the biggest savings coming from lower fleet ownership costs following the offloading of several aircraft in the year.
KQ subleased three Boeing 777s, two Boeing 787s and sold two Boeing 777s, bringing fleet costs down by Sh14 billion to Sh15.5 billion.