Kenya Airways B787-8 Kenya Airways (KQ, Nairobi Jomo Kenyatta ) needs continued government support as it remains in a “precarious financial position” with recovery to pre-COVID levels unlikely before 2024 given delayed vaccinations in Africa, says chief executive Allan Kilavuka.
Briefing investors online on the airline’s half-year results ending June 2021, he said: “Definitely, the company needs financial support, and this is not a secret. We still need financial support from our principals or elsewhere. We are in a negative equity position, which means we are insolvent as an organisation, obviously made worse by the pandemic,” reports Kenya’s Business Daily. Kilavuka did not specify the amount needed.
Kenya Airways’ liabilities reportedly outstripped its assets by KES73.8 billion shilling (USD672.3 million) by June 30, 2021, compared with KES64.1 billion (USD583.5 million) at the same time last year.
The airline last year borrowed KES11 billion (USD100 million) from the state after it was grounded due to the pandemic.
During the first half of 2021, operations continued to be severely impacted by the COVID-19 crisis, resulting in a KES11.49 billion (USD104.6 million) net loss in the first six months, taking its accumulated losses to more than KES127 billion (USD1.1 billion) – even though the latest results were a 19.8% improvement on the KES14.33 billion (USD130.5 million) posted at the height of the first COVID wave in the first six months of 2020.
The Group’s total revenue during the 2021 half-year reduced by 9% to KES27.354 billion (USD249.145 million) as a result of the cessation of domestic scheduled operations in April 2021, travel restrictions, and lockdowns in the carrier’s key domestic and international markets including the UK, India, China, the UAE, and the US, the airline said in a statement.
Kenya Airways said it currently served 40 international destinations and two domestic routes with significantly reduced frequencies of about 65% compared to 2019. Before the pandemic, it had flown to 40 African destinations. However, COVID-19 restrictions by various states, a slow vaccination roll-out resulting in less than 2% of Africans being vaccinated, and stringent travel restrictions on African travellers in European markets all contributed to a 20% drop in passenger uplift and a 17% decline in passenger revenue to KES20.2 million (USD184,000). Chief Financial Officer Hellen Mathuka said the airline held KES10 billion (USD91 million) in unflown revenue from unused tickets, down from KES13.9 billion (USD126.5 million) in December.
However, cargo revenues increased by 60% as the Group increased cargo […]