KQ flight at Moi Airport Mombasa High operation costs saw Kenya Airways (KQ) sink deeper into losses for the financial year ended December 31, 2019.
According to the company’s consolidated financial statement released today ahead of an investor briefing scheduled for tomorrow (May 27), the airline comprehensive loss widened to 8.85 billion from Sh5.94 billion in 2018, triggering a 49 per cent KQ, as it is known internationally reported a gross loss of 12.98 billion, a 71 per cent further drop compared to Sh7.55 billion loss the previous year.
The firm attributed the loss to an increase in operating costs that grew by 12.4 per cent to Sh129.1 billion compared to Sh114.8 billion.
Even so, the airline’s income grew to 128.3 billion from Sh114.1 billion in 2018.
The poor results saw shareholders incur Sh2.23 loss per share, almost doubling an Sh1.30 loss reported in the previous financial year.
The national carrier which is on the verge of being nationalised issued a profit warning in mid-December last year, saying its end-year loss will worsen by at least 25 per cent.
In a statement to investor KQ chairman Michael Joseph said although the airline has realised improved revenue, profitability was constrained by the increased competition in the airline area of operation, which has increased pressure on pricing in order to remain competitive.
This is the third year in a row the airline is posting losses despite conducting Sh200 billion debt restructuring in 2016 to keep it afloat.
The plan conducted in 2017 was meant to push the airline bank to its wheels after reporting the highest loss in Kenya’s corporate scene. It had reported a loss of Sh26 billion in the year ended March 31, 2016.
Investors will be keen to hear how the new chief executive Allan Kilavuka is planning to redeem the firm from losses to grow their dwindling returns.