National carrier Kenya Airways (KQ) has recorded a Ksh9.88 billion loss for the first half of the year, which was less than the loss of Ksh11.48 billion it posted for the same period in 2021.
Due to increasing booking revenues, the company’s performance coincided with a more than the three-quarter increase in sales to Ksh48.10 billion. Operating costs increased by 50 percent to Ksh53.11 billion as a result of a steep increase in fuel prices globally, dragging down the performance, according to the airline.
The airline last generated a profit in 2012, with Ksh1.66 billion in net earnings. Due to the massive cumulative losses, KQ has fallen into negative equity, indicating that the company is technically insolvent. KQ’s negative equity increased from Ksh64.2 billion the previous year to Ksh83.4 billion at the end of 2021.
KQ reported on Wednesday that, despite being burdened by high fuel prices, improving international air travel helped the it further reduce its losses in the second quarter of this year.
The airline has benefited greatly from several state bailout packages that have kept it afloat, the most recent of which is the Ksh20 billion in the supplementary budget that is currently before the National Assembly. The Ksh36 billion bailout for Kenya Airways in the current fiscal year, according to the Ministry of Transport, is conditional and will only be made available to the airline if it meets its goals. The government claimed that KQ has made progress toward achieving its goals and that it is only a matter of time before they return to profitability.
While counting on the government to provide financial support, KQ says it is returning two aircraft to their lessors and freezing the employment of new staff to continue lowering costs.
Hellen Mwariri Chief Finance Officer said that, in addition to increasing capacity, they are limiting the number of new hires to ensure higher productivity by allocating the task to the existing workforce.
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