Kenya Airways Records Sh7.55bn Loss for Year Ended 2018

Even as higher costs offset a jump in revenue for Kenya Airways, the carrier still announced a Sh7.55 billion net loss for the year ended December 2018.

The airline’s management also admitted to the ‘difficult’ nature of the new US route.

Sebastian Mikosz, KQ CEO, said on Tuesday that the Nairobi-New York route would not form the entirety of KQ’s financial lifeline. This is despite the route being crucial to the carrier’s growth and positioning in the region.

“I do not consider it to be a lucrative route. There is nothing lucrative about flying to New York. The route is necessary but difficult,” Mr. Mikosz explained as he announced the airline’s performance.

“New York is performing in the range that we expected. It is feeding our African network. It positions us differently,” he added.

Since Kenya Airways initiated its turnaround plan, the direct US flights have been the most marketed route to date.

The 2018 results are the latest in a six-year streak in which the national carrier remains in the red amid a turnaround.

Mr. Mikosz expressed optimism as the company’s underlying performance improved despite the loss.

“These are decent results. They are not an explosion of success,” he said. “The overall situation is improving. The investments are paying. And the losses are trimming.”

Mr. Mikosz, whose term expires in June 2019, said he is relying on addition of new routes, fleet expansion and collaboration with African airlines perceived to pose a threat to KQ’s regional market share to brighten the outlook in 2019.

KQ’s 2018 revenue, largely driven by passenger bookings, hit Sh114.18 billion. In the previous 9-month period, the revenue dropped to Sh80.7 billion.

In the period under review, the airline’s operating costs stood at Sh114.87 billion.

“Fuel, personnel and the cost of aircraft remain the top three drivers of airline costs contributing to about two-thirds of total operating cost for the airline,” said KQ which last year resumed a controversial fuel hedging policy.