, NAIROBI, Kenya, Jul 30 – National carrier Kenya Airways (KQ) has posted net loss of Sh25.7billion in its 2015 full year results from a net loss of Sh3.3billion in 2014, representing a 661 percent drop.
The management attributed the loss to volatility of exchange rates, intense competition especially from Middle East carriers as well as terrorism that led to travel advisories.
Other factors that led to the loss include fluctuation of oil prices and the international regulatory environment.
This comes as the airline received Sh4.2 billion from the government as a bailout plan that will see it get back to profitability.
KQ CEO Mbuvi Ngunze revealed that the national airline is now seeking $200 million (Sh20 billion) capital from Afrexim Bank that will help refinance the business.
“The 200 million dollars, which we have not received yet, will both help in the in the operations going forward as well as try to service the few debts we have here and there. Afrexim have been our partner and I remember they also guided us in getting the Sh1.9billion for expansion a while back,” Ngunze said during investor briefing on Thursday.
Afrexim Bank is expected to help in carrying out a comprehensive debt review with a view of improving overall standing.
“We are working smarter and are working hard to contain costs by reviewing contracts and sourcing better,” Ngunze said.
In efforts to manage costs, the airline has grounded and is planning to sell seven of its planes out of the total 52.
Group Finance Director Alex Mbugua said this is because the flights were not in use as required hence becoming expensive to maintain.
“If you calculate now, we have 45 fleet in operation. You know in this industry, a flight should at least be in use for 15 hours but that is not the case these,” he said.
Investors and Kenyans at large have continued to express concerns on what could be biggest loss in history for a trading company the national airline in the last four years in a row.
The Senate is already in discussion with the management on what is exactly ailing the airline.
READ: Senate committee commences probe into Kenya Airways
As a way forward, Businessman Chris Kirubi who attended the Thursday’s briefing called on the management to come up with urgent measures that will salvage KQ which is already on its knees.
“KQ should actually be taken off the stock market and it should belong to the key investors and let not pretend that this is a business to make money in the short term. This is not the time to talk about analysts about returns, because there is no return. Let us rescue the ship,” he urged.
Kirubi maintained that this was not the time to seek more debts but allow investors to take over in what could be seen as full privatization if taken away from Nairobi Securities Exchange (NSE).
However, Ngunze is optimistic that the management has laid proper 5 year strategy that will see the revival of the airline, within the shortest time possible.
The management also hopes that re-entry into West Africa, 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 wings.