Kenya Airways has declared a Sh12.5 billion pretax loss for the half-year ending Sept. 2014, marking a new three-year low for the national carrier which has been experiencing turbulent financial performance. As at the end of the six months to September, the airline said it had slightly over Sh4 billion in its account.

Managing Director and CEO Mbuvi Ngunze said even though the loss was bigger than the Sh7.9 billion loss declared last year, he was upbeat that the airline would soon turn around its fortunes. “It has been a challenging time but the world is bullish about economic growth in this region and that will help us immensely,” said Mr Ngunze.

“These are not the results that we would like to announce to our investors, but having put down significant investment in infrastructure, we can assure you that we are looking at turning around the company,” he added.

He was making reference to the airline’s ambitious fleet mordernisation programme that has seen KQ acquire among others six-Boeing 787 aircraft. It decision to also phased out its fleet of Boeing 777-200 aircraft in favour of its latest version (777-300) in line with international standards also contributed in watering down its financial standing.

The national carrier on Tuesday launched two luxurious lounges for first class customers valued at more than Sh300 million. (See https://businesstoday.co.ke/news/news/1415718049/kq-goes-broke-impress-its-wealthy-customers)

Mr Nguze was however adamant that the costly investment in the aircraft which now positions it as the carrier with the most modern fleet in Africa was necessary and would contribute to the expected turn-around. “The long term focus of the industry is growth and KQ would be ill-advised not to have an ambitious growth programme. Any airline that doesn’t have a vision for growth is on its deathbed,” he said.

Besides the costly, but strategic purchases, KQ’s Financial Director Mr Alex Mbugua said the airline also took a beating from the terror attacks in Mpeketoni, Lamu which led to the reduction of domestic flights to the lucrative tourism region following various travel advisories. The fire that burnt down JKIA’s arrival terminal in August last year as well as the Westgate attack and the South Sudan political unrest also hit the company’s balance sheet.

The CEO noted KQ had lost about Sh43.4 billion ($40 million) when it ceased operations in the Ebola hit regions in West Africa but the airline was ready to reopen the routes once the menace has been tamed. “Together with the government we will continue to evaluate the situation and determine the right time to resume our operations in West Africa.”

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