Kenya Airways Chairman Michael Joseph Kenya Airways is not being mismanaged, chairman Michael Joseph has said, but maintained government support is critical to keep the national carrier afloat.
This is in the wake of the Covid-19 pandemic which has hard-hit the aviation industry, projected to recover earliest 2024, according to the International Air Transport Association (IATA).
KQ, as it is known by its international code, reported a Sh36.57 billion loss for the year 2020. Total turnover shrunk by 60 per cent to Sh52 billion
This was heavily blamed on the pandemic which disrupted international and domestic travel which the airline’s passenger numbers drop significantly to 1.8 million compared to 5.2 million in 2019.
The airline has been on loss making a streak way before Covid-19, with losses dating back to 2015, when it reported a Sh25.7 billion loss. In 2016, KQ sunk deeper in the red, posting a Sh26.2 billion loss
This, however reduced to a Sh10.21 billion net loss in 2017, then Sh7.55 billion in the year ended December 2018. In 2019, the Nairobi Securities Exchange(NSE) listed carrier reported a Sh12.9 billion loss.
The year-on-year losses has been blamed on mismanagement and poor investment decisions, which has seen the carrier survive on government bail-outs and debt restructuring by its lenders.
In an interview with Citizen TV on Wednesday night, Michael Joseph dismissed “mismanagement claims”, saying the board and management were making progress in turning around the airline, until Covid struck.
He said losses for last year had been projected at Sh6 billion down from the Sh12.9 billion the previous year.
“We had planned to halve the loss through a number of initiatives including increasing our revenues, reducing our costs, streamlining things, introducing new products particularly cargo but Covid added Sh30 billion to that loss,” Joseph said.
He noted the airline incurred losses of up to $2 million (Sh219.6 million) per plane when flights were grounded in March last year.With a fleet of 36 aircraft which includes nine Boeing 787 Dreamliners, 10-Boeing 737 aircraft, and 17 Embraers, it puts the total losses on aircrafts alone at about Sh7.91 billion last year, as fixed-costs remained high against low revenues.The Kenya Airline Pilots Association (KALPA) and the Kenya Aviation Workers Union (KAWU) have both maintained that poor management is to blame for the year-in-year-out losses.The airline has three chief executives at between 2017 and 2021, with the latest being Allan Kilavuka who took over from former Polish CEO Sebastian Mikosz.The former […]
