Kenya Airways records Ksh 11B loss

The National Carrier Kenya Airways has recorded a pretax loss of Ksh 11.8 billion in half year results from Ksh 12.4 billion in 2014.

According to Finance Director Alex Mbugua, this was helped by lower fuel costs.

“The fuel costs have come down significantly,” Mbugua told an investor briefing, although he said those savings were partly offset by a revaluation of the airline’s dollar denominated loans that led to foreign exchange losses.

Mbugua said fuel costs fell 37.4 percent during the period to 13.58 billion shillings, adding that the actual savings from price movement of oil was 7.95 billion shillings.

KQ also recorded an operating loss of Ksh 2.17 billion from Ksh 10.45 billion in 2014.

Net financing costs are up to Ksh 3.47 billion from Ksh 1.55 billion.

KQ also recorded a forex loss of Ksh 4.89 billion from Ksh 1.17 billion.

Last year, KQ reported a pretax loss of 12.4 billion shillings.

In July this year, KQ reported a pre-tax full year loss of Ksh 29.7 billion for the year ended March 31st, 2015.

KQ further posted a Ksh 25.7 billion full year loss after tax, this being the biggest loss to be posted by a listed company in Kenya.

The airline Managing Director Mbuvi Ngunze attributed the loss to the slowdown in the tourism industry and the high costs of fuel.

The airline also attributed the loss to low ticket sales leading to cancellation of flights, flat revenue growth and increased overheads.

This has in turn cost the carrier more as they put up customers whose flights had been cancelled in hotels.

In March this year, Kenya Airways was set to retire 10 of its pilots as part of its fleet modernization.

Kenya Airways Corporate Communications Manager Wanjiku Mugo said the airline had issued retirement letters to the 10 pilots in accordance with the airline’s collective bargaining agreement with the Kenya Airline Pilots Association.

The announcement came months after the airline announced that it had sold its fleet of four Boeing triple seven dash 200 aircraft at a loss of 5 point 4 billion shillings owing to the depreciation in the value of the aircraft.

During the first six months of its financial year, Kenya Airways announced that it had made a net loss of 10 point 4 billion shillings that it blamed on slowed revenue growth and increased fleet operation costs.

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