This archive report was first published on 27 August 2019.
Kenya Airways has posted a significant financial loss in its 2019 half year earnings, with a pretax loss of Ksh.8.56 billion as of June 30, 2019.
This marks a more than double increase in losses for the airline, which recorded a Ksh.4 billion loss for the same period in 2018.
The expanded loss is attributed to increased operational costs and elevated impairment losses. Operational costs expanded by Ksh.10.9 billion to Ksh.67.1 billion, outpacing revenues by Ksh.2.3 billion.
Kenya Airways also incurred a one-off impairment loss of Ksh.1.9 billion and a further shrink of Ksh.1.5 billion from increased provisioning due to a shift in accounting rules.
“The switch from IAS 9 to IFRS 16 cost Ksh.1.5 billion with operational leases now being considered as assets in financial statements,” said KQ’s Chief Financial Officer Hellen Mathuka.
Despite the financial setback, the airline remains committed to its network expansion strategy, with plans to continue adding new destinations and increasing flights frequency.
“If we manage costs, we can manage the bottom line. Costs have always been our biggest concern,” said Kenya Airways Chairman Michael Joseph.
“We have to keep sweating our current fleet by being in the air more often. This is achievable by employing the same fleet for network expansion,” added Kenya Airways Chief Executive Officer Sebastian Mikosz.
