Kenya Airways needs a $500 million bailout to survive, Kenya Airways CEO Allan Kilavuka ( pictured ) has said.
Kenya Airways has made Sh36.6 billion after-tax loss for the financial year ending December 2020 compared to Sh12.9 billion loss in 2019. The loss is attributed to the impact of the Covid-19 pandemic.
The financial year under focus was the worst in the history of the aviation industry. Airline passenger traffic was reduced to levels last seen in 1999, wiping out 21 years of airline passenger traffic growth.
During the period, Kenya Airways shut down its scheduled network operations from April to July last year following a directive from the government to suspend all scheduled passenger services into and out of the country to curb the spread Covid-19 virus. Read More
But speaking on Spice FM on Thursday, the chief executive said it is time Africa’s leaders look at aviation as an essential industry, not luxury.
According to Kilavuka, the Sh36 billion loss was expected as flights were grounded for many months.
The pandemic hit the aviation industry but KQ was struggling even before, Kilavuka said.
"It’s [Kenya Airways] is in ICU but the vitals are still working."
An optimistic Kilavuka went on, adding that the loss should not be a surprise because airlines across the world made losses, especially in 2020. He cited North American airlines, which he said recorded $9-$12 million loss per aircraft.
He said KQ is not proud of the loss and that it expected a lower loss of Sh6 billion.
Africa solutions The CEO further called for the consolidation of the continent’s aviation assets since “we are too small to compete”.Kilavuka cited European airlines that have consolidated their assets to have more than 800 aircraft, against KQ’s 34.“We need scale to survive the future and reduce costs."Kilavuka added that it is not only KQ that needs a bailout, and that many airlines around the world do so too."Effects of Covid will be there for a long time and resources are drained."Questioned on why it is expensive to fly in Africa, the chief executive said there is poor connectivity, 40 per cent lower than anywhere else in the world.According to Kilavuka, it is two-three times more expensive per kilometre than any other place in the world.He also cited low capacity options as well as the people’s inability to pay.Part of KQ’s plan to fight the turbulence is to revamp its digital platforms as well […]