NAIROBI, KENYA, MAR 21— Kenya Airways (Plc) has recorded a Ksh6.1 billion net loss for the nine months period to December, blamed on higher operating costs occasioned by high global fuel prices and last years’ prolonged elections in Kenya.
This comes as the Nairobi Securities Exchange listed airline moves to implement a director’s decision to change the group’s year end from March 31 to December 31.
During the nine-month period, fuel prices continued on an upward trend closing at $62 per barrel hence increasing the group’s operating costs by nine per cent, the airline reported on Wednesday.
The political environment that reduced traffic and the high fuel costs ate into the airline’s total income which stood at Ksh80.8 billion, against a total operating cost of Ksh79.5 billion.
“The group’s revenue for the period under review were heavily impacted by the elevate political tension as a result of the prolonged electioneering period which saw reduced transit and terminating passenger through our hub JKIA,” chairman Michael Joseph said.
The airline which is on a recovery plan recorded a Ksh9.9 billion net loss the previous financial year (12-months) ended March 31, 2017.
In the nine-month period, April 1, 2017 to December 31, 2017, KQ as it is known by its international code however managed to record an improved operating profit of Ksh1.31 billion. In the prior year covering 12 months, the operating profit closed at Ksh897 million.
Passenger numbers stood at 3.46 million for the nine months period ended December 2017. The prior year period covering 12 months, passenger number was 4.46 million.
Cabin factor for the nine month was 76.2 per cent. The prior year 12 months period had a cabin factor of 72.3 per cent.
“Yield per revenue passenger kilometer declined by 6.5 per cent for the nine months period ended 31 December 2017 driven by market capacity pressure and currency fluctuations,” the airline said in its financial report.
Fleet costs for the period was Ksh10.55 billion. During the previous period covering 12 months, KQ had a fleet cost of Ksh15.5 billion.
“Although reporting an improved performance, the airline operated in a challenging environment,” Joseph noted.
The airline’s operations last November received a shot in the arm after its shareholders agreed to convert debt into equity.
The restructuring saw the government increase its shareholding to 48.9 per cent after agreeing to convert a Ksh24 billion loan into equity.
A consortium of 10 local banks, through a special purpose vehicle – KQ Lenders Company 2017 Ltd, now own 38.1 per cent shares of the airline, after having their Ksh17.3 billion debts converted to equity.
According to KQ Chief executive Sébastian Mikosz, the restructuring made the airline competitive, setting it on a path of profitability with a healthy liquidity.
Having concluded the financial restructuring, the group is now focusing on an operational turn around that will provide a stable base for long-term growth, the management has said.
This is through an optimized network that creates more connections through its Jomo Kenyatta International Airport hub in Nairobi.
Among key routes KQ is counting on is the Nairobi-New York, scheduled to commence later this year.
The airline is expecting a revenue boost of about 10 per cent from the direct flights between Kenya and the United States of America.