Kenya Airways has reduced its half-year loss by 19.6 per cent to Sh11.5 billion, from Sh14.4 billion posted during a similar period last year, on account of cost-cutting initiatives implemented during the period.
In a statement, the airline says the measures helped to partially offset a deceleration in revenues.
During the period under review, the airline’s total operating costs declined by 10.4 per cent to Sh34.6 billion from Sh38.6 billion recorded the previous period.
Meanwhile, total revenue reduced by 9 per cent to Sh27 million, which is attributable to the cessation of domestic scheduled operations in the month of April 2021.
Read: African airlines’ passenger traffic increase by 9.9 per cent in six months to June 2017
It was also on the back of travel restrictions, and lockdowns due to a surge in virus cases in key domestic and international markets including the UK, India, China, UAE, and the US.
Before the pandemic, the carrier flew to over 40 African destinations. Currently, the airline operates in 40 international destinations and two domestic routes with significantly reduced frequencies of approximately 65 per cent as compared to 2019. COVID-19 restrictions on travel by various states remain the biggest challenge.
In addition, the rollout of the coronavirus vaccines in the African continent remains low; with less than two per cent of Africans having received the vaccine while in other markets high vaccination levels have allowed the progressive reopening of their economies.
The current upsurge coupled with the continent’s low vaccination rates has contributed to low passenger traffic from Africa to other markets like Europe who have issued or extend stringent travel restrictions on travellers from African countries in a measure to prevent the spread of the new COVID-19 variants.
As a result, the airline says a total of 0.8 million passengers were uplifted during the first half of 2021, a 20 per cent decline in comparison to a similar period in the previous year.
Though passenger revenue declined by 17 per cent to Kshs. 20,230 million, cargo revenues went up by 60 per cent due to a strong focus on freighter operations.
The Group has been able to uplift an increased 500 tonnes monthly, showing its cargo division’s outstanding agility in adapting its operations to provide air freight services in this new environment.
Commenting on the results, KQ’s Board chair Michael Joseph said the company’s main focus was and still is cash conservation, adding that the company has exploited opportunities of raising much-needed revenue through passenger charters and ramped up cargo operations.
“Other initiatives undertaken by management include partnerships with other airlines, lease rentals re-negotiations, payment plans with suppliers, and partial deferment of staff salaries.
IATA indicates that Q1 2021 results show that the start of the year was still very weak for the airline industry, as virus outbreaks paused air travel recovery in many important markets.
Faced with long recovery prospects, diminishing revenue occasioned by reduced demand in the passenger business, and increased costs due to tighter health and safety measures, the business focus for the rest of 2021 will be ensuring the survival and the rebound of the company.
Read: Kenya Airways cuts losses in half
Kenya Airways Group Managing Director and CEO, Allan Kilavuka said, “Notwithstanding the current global crisis brought about by the COVID-19 pandemic, we will continue to adopt an agile approach in responding to the current dynamic marketplace. Our focus is on business recovery and to continue contributing to the rebuilding of economies and communities impacted by the pandemic. Restoring customer confidence for business and leisure travel will be key to growing demand, as well as creating agile and nimble business models that are sustainable and responsive to the customer’s needs.”
Cashless transactions
The results come at a time when the airline says it is implementing contactless transactions to enhance customer and staff health and safety priorities, in the wake of the pandemic.
The service will be effective from 1st September 2021.
According to the KQ, the contactless transactions align with its strategy to develop sustainable business operations through investing in innovative processes and technologies for customer safety and security throughout the customer journey.
KQ says it will encourage its customers to use mobile money, credit, or debit cards to make any transactions at the Jomo Kenyatta International Airport (JKIA), including purchasing tickets and paying for checked-in baggage.
