This archive report was first published on 28 August 2019.
Kenya Airways has reported a staggering half-year loss of Ksh8.56 billion ($83 million), a 112 percent increase from the previous year's loss. The airline's revenue jumped by 12.1 percent to Ksh58.5 billion ($565 million) in the period, but costs rose by 15.4 percent to Ksh61.4 billion ($593.4 million), eating into the carrier's margins.
According to board chairman Michael Joseph, the airline's decision to expand into new routes and return two Boeing 787 planes sub-leased to Oman Air contributed to the increased operating costs. The Treasury is Kenya Airways' biggest shareholder, controlling a 48.9 percent stake, while banks own 38.1 percent of the airline.
Kenya Airways is now banking on nationalisation to turn around its fortunes, with the airline believing that the benefits of tax exemptions after nationalisation will improve its financial position. Nationalisation is expected to help cut costs and enable the airline to effectively compete with rivals like Ethiopian Airlines.
“Nationalisation is not what we want to be but it is what we need to be in order to be where we want to be,” said Mr Joseph. He blamed taxes slapped on the national airline for its dwindling performance.
Published on August 28, 2019, by BUSINESS DAILY.
