KENYA – National carrier Kenya Airways (KQ) has reported a net loss of US$329.5 million for 2020, the worst ever in the history of the airline, on account of Covid-19 disruptions that led to a sharp decline in passenger numbers.

The loss, for the financial year ended December 2020, is almost triple more the US$118.2 million net loss it had posted a year earlier, and now deals a major blow to the recovery efforts of the national carrier.

KQ chairman Michael Joseph says the outlook still looks bleak and the airline will be seeking a right-sized network to match the prevailing demand.

“The Covid-19 global outbreak in 2020 was beyond anyone’s prediction and its impact on the industry is expected to continue affecting air travel demand for the next two to three years,” said Mr Joseph.

KQ’s loss, also the worst ever results in corporate Kenya, came on the back of strict Covid-19 control measures across the globe that crushed demand for air travel.

The airline says that passenger revenue dropped by 67.5 per cent to US$306.8 million as passenger numbers reduced by 65.7 per cent to 1.8 million.

“Approximately 70 per cent of the total passengers carried in 2020 were flown during the first three months of the year, demonstrating the drop in demand as the global crisis deepened during the year,” said Mr Joseph.

“The Covid-19 global outbreak in 2020 was beyond anyone’s prediction and its impact on the industry is expected to continue affecting air travel demand for the next two to three years”

Michael Joseph – Chairman, Kenya Airways

Total income dipped by 58.9 per cent to US$480.7 million underlining the impact of a sharp fall in passenger numbers as countries restricted movement to contain the spread of Covid-19.

The latest loss means that KQ has now gone for the eighth straight year without profits, extending its cumulative losses to US$1.17 billion.

The airline last made a profit in 2012 when it closed with net earnings at US$15.1 million.

Kenya reported its first Covid-19 case mid-March last year, prompting the state to ground both domestic and international flights for months.

KQ reacted to the Covid-19 hardships through layoffs and massive salary cuts to reduce the pressure on the bottom-line.

However, the muted demand in passenger business and increased costs due to tighter health and safety measures kept recovery out of reach for the airline.

In a bid to turn the struggling airline to profitability, Kenya government hatched a plan to nationalise and merge it with other state enterprises like Kenya Airports Authority in October 2020, but the bid flew into headwinds after a section of lawmakers blocked the legislation citing lack of public participation citing the country’s constitution.

The bill is yet to presented to Parliament for debate and approval.

The move would have led to the formation of Kenya Aviation Corporation, the holding firm for subsidiaries including Kenya Airways, Kenya Airports Authority and Aviation Investment Corporation.

Kenya Airways was privatised 24 years ago but sank into debt and losses in 2014 after a failed expansion drive, costly purchase of aircraft and a slump in travellers after a major terror attack.

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