Kenya Airways (KQ) has released its results for the six months ended June 2021, posting a Ksh11.486 billion loss after tax. It is a slight improvement from the same period last year when the national carrier posted a Ksh14.4 billion loss.
Loss before income tax stood at Ksh11.542 billion in H1 2021 down from Ksh14.355 billion in the same period last year.
The company has focused on cash conservation, and managed to trim operating costs by 10% in H1 2021 driven by reduced operations for the period.
“Of the total operating costs, direct operating costs declined by 13%, whereas fixed costs declined by 7% as fixed costs had to be spread over a dramatically smaller
capacity…Again, this is a testament to the tremendous job that the management is doing to contain costs and conserve cash,” KQ noted in a statement.
The airline notably pursued new opportunities to raise revenues in the wake of low demand in the passenger business, including charters and enhanced cargo operations.
Management also pursued partnerships with other airlines, lease rentals renegotiations, payment plans with suppliers and partial deferment of staff salaries.
With KQ and the global aviation industry in general having taken a hit from the Covid-19 pandemic, the carrier asserted that its business focus for the rest of 2021 was on “ensuring survival and rebound”.
The board attributed to the pandemic lower revenues on reduced demand in the
passenger business and increased costs due to stringent health and safety measures.
“The industry view is that recovery from this pandemic will take time. Aviation experts predict that evolving customer behaviour will continue to suppress passenger numbers until 2024, where full recovery to 2019 levels is forecasted,” observed Board Chair Michael Joseph in his statement, adding: “Therefore, the market will continue to witness overcapacity and airlines, including Kenya Airways, will need to develop models that will support better utilisation of assets and resources.
Joseph noted that KQ’s 2021 results would continue to be negatively impacted by the pandemic which has resulted in suppressed air travel demand.
He, however, highlighted the company’s commitment to an efficient network and improved service quality and delivery.