NAIROBI, Kenya, Jun 14 – Kenya Airways has recorded a Sh7.8 billion loss after tax in the financial year ending March, a significant drop from the Sh1.6 billion profit posted last year.
Passenger revenue decreased by 11.8 percent at Sh85.1 billion from Sh95.2 billion, while turnover decreased by nine percent at Sh98.9 billion from Sh107.9 billion in the 2011/2012 financial year.
Kenya airways Chairman Evanson Mwaniki attributed the massive loss to harsh economic and geopolitical conditions and sustained under-performance of the European economy.
He also blamed the losses on what he termed as ‘volatility in fuel prices’.
Mwaniki said the airline has experienced constrained passenger traffic due to travel advisories issued by key markets sources in the West, mainly due to fears of terror network Al-shaabab.
However, passengers transported within Kenya remained at last year’s level due to the increase of point-to-point travel within Kenya.
Direct operational costs remained unchanged at Sh77.2 billion compared to the prior year, while overheads were at par with the previous year despite the inclusion of Sh826 million staff rationalisation cost.
“Management has undertaken stringent cost containment measures that have also seen non-employee related costs reduced by five percent in the year,” he said.
He however noted passenger traffic increase in the Africa region due to additional frequencies and operating larger aircraft in the region.
“Additional frequencies were introduced to Juba and more wide body aircrafts were flown into Kinshasa while two extra flights were scheduled to Dakar and Abidjan,” he said.
He said that the Introduction of the B747 freighter operations between China and Nigeria saw a 17 percent increase in total cargo tonnage compared to last year.
Mwaniki said that further growth within the cargo was driven by increased belly capacity offered by additional wide body services.
Kenya Airways is considering starting a fuel procurement company to cut on fuel costs (which was the biggest cost) and are in talks with relevant government arms.
“We are also set to open new routes in Livingstone, Abu Dhabi and Blantyre and put up our own hotel to cut on costs” Mwaniki Revealed.
The directors do not recommend payment of a dividend.
International Air Transport Association (IATA) forecasts net profits of $10.6 Billion in the global aviation industry in 2013.