Corrupt Kenya will find it hard to survive the economic effects of Covid-19

Kenya Airways flight. Kenya Airways was already a troubled entity even before the outbreak of the coronavirus (Covid-19). Now the virus threatens to bring the national carrier to its knees, if not the grave. Internal communication from the CEO to the airline’s employees paints a bleak picture. Yet it is a picture that could be mirrored in other firms in the aviation sector. It could catch up with other sectors too, given the linkages and networks in business and economies. Those who are already weak will usually take the first blow and even the worst beating during pandemics and disasters. The World Health Organisation (WHO) calls them the vulnerable groups. In the wake of Covid-19, WHO has flagged the aged and those with preexisting conditions and illnesses as the most vulnerable. Others are pregnant mothers and the malnourished. Yet, disasters easily break through the immediate orbits of concern. They travel on, to wreak havoc in other circles, too. Even here, the first to go down will be those with preexisting conditions. In the investment sector, KQ was always vulnerable to shocks of the kind that the virus has brought. Financial fatigue Towards the end of last year, KQ was showing signs of financial fatigue. There was hope the government could buy it out. The airline’s stock on Nairobi Securities Exchange fell by close to 72 per cent between September 2018 and September 2019. The airline’s woes were in part fueled by managerial instabilities that drove discordant comings and goings in senior ranks. If the spread of epidemics is a factor of movement and contact, the global transport sector has naturally been among the very first ports of call. An ailing KQ has been caught squarely in the crosshairs of the crisis. The KQ internal communication of last Friday shows the airline is set to freeze all operations. “So far, we have reduced approximately 65 per cent of our flights,” the internal communication from the CEO Alan Kilavuka, said. “Should this trend continue, we will have to make the difficult decision to temporarily suspend our operations,” it concluded. Accordingly, KQ is placing half of its aircraft on long-term storage, while the rest are getting grounded for service. It is not clear where this leaves hired aircraft. KQ has, however, been in a curious tango in which some of the major shareholders are also the owners of some of the aircraft […]

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.

Leave a Reply