The airline's recovery efforts were dented by higher fuel prices, with its operating costs going up 53 per cent to Sh53.11 billion from Sh34.63 billion last year.
Lower oil prices, the airline said, would have seen it reduce the loss further.
"The group saw an increase of 53 per cent in total operating costs. This is mainly driven by the increase in fuel prices and major currency fluctuations witnessed this year, in addition to increasing operations for the period," KQ said in a commentary on the results.
"Jet fuel and crude oil prices rose markedly in the first quarter of 2022, putting pressure on the already strained airline finances. The elevated jet fuel price adds to the airline's operating costs."
The carrier's 19 per cent reduction in aircraft leasing costs was, however, short of the 35 per cent reduction in costs that KQ had hoped to get. Mr Kilavuka said that was the best deal they could get, terming the negotiations difficult and lengthy. The lessors agreed to the cut in their revenues on the condition that the airline pays their arrears that including payments deferred when Covid-19 hit and the airline's revenues drastically dropped. The cash-strapped KQ however expects a government bailout to aid its restructuring programme.
The reduction in aircraft leasing costs is among the milestones that the airline needed to achieve before the National Treasury can disburse more money to enable the carrier complete the restructuring.
KQ Chairman Michael Joseph said the government agreed to finance the airline over the next two years, which will enable it to find a firm footing. "Earlier this year, Parliament approved additional budget support to KQ," he said. "After lengthy negotiations with IMF and Treasury, it was agreed that KQ would get the financing over the next two years.
"The release of these funds was conditional on KQ reaching certain milestones including reducing costs. This support will not be continuous. It will be the last but will put us on a path to recovery."
Parliament approved Sh36.6 billion in the budget for the current financial year to fund the carrier's turnaround plans.
The government is also expected to service KQ's loans to the tune of Sh102.8 billion, according to a July IMF report. IMF has been pushing for restructuring of State-owned enterprises to cut their reliance on government funding, with KQ being among those earmarked.