High fuel costs and elections sink KQ into Sh6.1b loss

The loss has been owed to last year’s prolonged electioneering period and increased fuel prices. [File, Standard]

National carrier Kenya Airways (KQ) has reported a Sh6.1 billion net loss for the nine months to December.

The airline said yesterday its turnaround efforts were slowed down by last year’s prolonged electioneering period and increased fuel prices.

The national carrier made an average loss of Sh677 million per month in 2017, an improved position compared to the average monthly loss of Sh830 million in 2016.

Financial restructuring

The airline nine-month loss came even as it changed its financial year end to December 31.

Previously, its financial year ended on March 31. This has presented a challenge in presenting the airline financial results for last year, particularly the comparison of its performance in the nine-month period to December and the 12-month period to March 2017.

In the year to March, KQ reported a net loss of Sh10 billion. The results came against the background of a financial restructuring that was concluded in November last year.

The process saw the Government emerge as the largest shareholder with a 48.9 per cent stake and a consortium of local banks own 38.1 per cent of the carrier following a conversion of debt into equity.

KQ Chief Executive Sebastian Mikosz said at an investor briefing in Nairobi the long electioneering period and higher oil prices had the biggest impact on the airline’s financial performance.

“Domestic traffic dropped by 20 per cent during the elections period. The East African market was also affected,” said Mr Mikosz.