Kenya Airways (KQ), the national airline of Kenya, announced on March 27th, 2023, that it has posted a record loss of $290.5 million (38.26 billion shillings) in 2022. This is one of the worst results in its history and the biggest loss for a company listed on the Nairobi stock exchange.
The airline noted that its losses have more than doubled from $120.5 million (15.87 billion shillings) in 2021 to $290.5 million (38.26 billion shillings) in 2022. The underperformance, it said, was mainly due to the depreciation of the shilling, the increase in the price of jet fuel, and the accumulation of debt.
The carrier has indicated that it is in a difficult financial situation with a debt of $2.1 billion (277 billion shillings). And that it is hoping for support from the government to repay its debt.
The company stressed that it has suffered from the increase in the price of kerosene over the past year without any subsidy, representing 53% of its direct operating costs.
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For the past decade, Kenya Airways has been going through a turbulent period with a delicate financial situation and a management problem
Despite this loss, passenger numbers were 3.7 million, up 68% year-on-year. Revenue grew by 66% from $533 million (70.22 billion shillings) in 2021 to $887 million (116.78 billion shillings) in 2022.
“This year 2023 is looking good and we hope to continue on this path. We really expect that by the end of this year 2023, we will break even from a financial point of view and reach the profit level in 2024,” said Allan Kilavuka, managing director of KQ.
For the past decade, Kenya Airways has been going through a turbulent period with a delicate financial situation and a management problem. During this period, the company has had four managing directors who have failed to turn the company around. The strategy shifted from expanding the size of the fleet to reducing it, with accumulated losses reaching $1.3 billion (172.68 billion shillings) as part of the government bailouts.
Established in 1977 after the demise of East African Airways, KQ is 48.9 percent owned by the Kenyan government and 7.8 percent by the Air France-KLM group. The remaining 43.3% of shares are owned by Kenyan investors.
The Nairobi-based airline carries nearly four million passengers to 42 destinations each year.
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First published in Financial Afrik, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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