Kenya Airways (KQ) fears it could lose between Sh42.4 billion and Sh53 billion by the end of the year if the coronavirus pandemic persists.
The airline has so far lost more than Sh10 billion because of Covid-19, which has slammed the brakes on the tourism and travel industry.
Speaking during the company’s virtual annual general meeting yesterday, Chief Executive Allan Kilavuka said they were taking measures to mitigate the losses, including a pause on route expansion.
“We will not be opening new routes, at least for the next two years, because we are not in a financial state to invest in a new route,” said Mr Kilavuka.
“That we will communicate in the near future, but we are not expanding in the foreseeable future.”
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He however said the strategic investment initiatives the airline has been implementing are progressively paying off.
This includes a positive performance for the year ended December 31, 2019, that saw a 12.4 per cent increase in revenue from Sh114 billion in 2018 to Sh128 billion, the airline’s best performance yet.
Passenger numbers also grew to a record 5.1 million, attributed to network expansion gains.
The national carrier says it will focus on reorganisation to create a model that is agile, responsive and relevant to the needs of the changing market and the diverse customers after the pandemic.
It is also seeking support from the government amid the risk of total decimation.
“We have asked the government for support, like every other airline in the world. Many airlines have gotten a bailout. The government has many other priorities; dealing with the virus is probably the most important one,” said KQ Board Chairman Michael Joseph.
With shrunken incomes, Kenya Airways has seen the grounding of most of its planes, and does not plan to expand the fleet until 2023.
Mr Joseph said reopening of the skies would cushion the airline from further woes.
“Our job in the board is to be ready to resume flying as soon as we can to try and mitigate these losses, as there is a limit to how many losses you can carry,” he said.