National Carrier, Kenya Airways (KQ) suffers a huge blow again of KES25.7bn net loss including unrealized losses on fuel derivatives of KES5.8bn. The company attributed its turbulence due to effects of travel advisories, increase in fleet ownership cost and high revenue cost that have greatly impacted the airline’s operational and financial performance in 2015 full year results. Other factors that led to the loss include high exchange rates, fluctuation of oil prices and the international regulatory environment.
At the unveiling of the end year results, the management announced that it has completed its first phase of its fleet renewal program involving the acquisition of long delayed B787(5) Dream liners, B777-300(2) and B737-8000NG(3). At the same time, an entire fleet of B767’s were exited from operations.
All is not lost for the airline as it is in the process of securing a loan of KES20bn from Afrexim Bank ,its financial advisor, to help build up its profits. The management also hopes that re-entry into West Africa through Monrovia route, revision of some travel advisories and the region attracting a lot of Foreign Direct Investments are great opportunities that will see it get back on its feet. Kenya Airways will partner with China Southern Airlines which is set to ply from Nairobi to Guangzhou routes in August.
Recently, the Government issued a soft loan of KES4.5bn to save Kenya Airways (KQ) from collapsing. The government has 29.8 per cent shareholding in the airline which made a net loss of KES10.5bn in the half-year ended September, reversing a net profit of KES384 m reported a year earlier. The management is set to meet the Senate committee again to argue its case on the process of leasing and buying of aircraft since 1996 and issues regarding to investments.