This archive report was first published on 4 August 2020.
Kenya Airways is facing an uncertain future amidst the COVID-19 pandemic, which has worsened the airline's financial woes. The national carrier reported a weekly loss of Sh784 million ($74 million) when most of its operations were grounded.
According to a status report filed in court, the airline will find it challenging to maintain its 'going concern' status. The report details the extent of losses made since March this year and plans to lay off 40% of its employees aimed at saving about Sh600 million a month.
Kenya Airways owes suppliers Sh22 billion, which has ballooned from Sh17.5 billion in March. The airline fears its suppliers might move to court to recover unpaid dues, which could trigger a series of events including a worst-case scenario — liquidation.
Despite having restarted its operations in local and international markets, Kenya Airways does not expect recovery until 2023 in line with global airline industry expectations. However, the airline is expecting further disruptions in 2022 due to polls, which usually slows down business especially travel.
“To better illustrate this decline, it is worth noting that before the onset of COVID-19, KQ operated revenue of approximately Sh2 billion per week. The onset of the pandemic has seen these revenues shrink to Sh300 million per week, which cannot cover the operating costs of the airline, leaving KQ at a weekly loss position of Sh745 million,” stated the carrier in the report.
