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National carrier Kenya Airways has reported a Sh12.98 billion loss in the year ended December 2019.

The loss was largely attributed to an increase operating costs that offset growth in revenues and adoption of the IFRS 16.

"The Group saw a 12.4 percent increase in operating costs, driven by the increase in capacity deployed and an increase in fleet ownership costs attributed to the return of two Boeing 787 aircraft that had been subleased to Oman Air," said Kenya Airways Chairman Michael Joseph.

Kenya Airways (KQ) issued a profit warning in December last year, indicating its annual loss would expand by at least 25 percent to Sh9.5 billion from 2018.

SEE ALSO: KQ shares put on hold at the bourse

Revenue went up by 12.4 percent to Sh128.31 billion due to improved passenger and cargo numbers due to expansion of network.

"In the year under review, the Airline invested in new routes to the network; Geneva, Rome, and Malindi. This expansion resulted to a 6.7 percent increase in passenger numbers to hit record
5.1 million passengers," said Joseph.

The debt ridden airline applied for Sh7 billion State bailout in March. Its aircraft were grounded as the aviation industry took a hit from the coronavirus pandemic.

Treasury has failed to offer a commitment on the bailout with CS Ukur Yatani saying the State was keen on a long-term solution anchored on nationalisation of Kenya Airways, arguing the carrier’s financial troubles go beyond the corona-related woes.

"The crisis has significantly affected economies around the world and the aviation sector in particular. We estimate that it will take at least a year to gain the confidence of the travellers and start recovering the travel demand," said Joseph.

SEE ALSO: Kenya Airways shares temporarily suspended from NSE


Kenya Airways IFRS 16 Michael Joseph KQ
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