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By:
Doorthy Nakaweesi & Edwin Okoth | |||||||||
| Posted:
Jul,31-2015 19:01:33
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Kampala / Nairobi- Kenya Airways (KQ) made the biggest net loss in the Kenya's corporate history posting Shs796.7b (Ksh25.7b) for the year ended March.
The loss before tax was at a record Shs920.7b (Ksh29.7b), as capital expenditure and operating costs raced ahead of the airline's revenues.
Reacting to the results, during an investor briefing, Mr Chris Kirubi, a Kenyan businessman and a key KQ shareholder, said: "This is bullshit", recommending drastic measures to turn the airline’s fortunes around.
"Kenya Airways should be taken off the market, leave it for private investors.. We need to buy out KLM, get them out and try to have an EAC common market strategy," he said.
The loss widened the Shs102.3b (Ksh3.3b) the airline posted the same period last year, reflecting the impact of acquiring new aircraft on debt.
Kenya Airways' revenue increased by 3.8 per cent to Shs3.413 trillion (Ksh110.1b) despite a rise in passenger numbers, with the airline saying it was forced to cut fares in response to competition from Middle East.
The airline's fleet costs doubled to Shs802b (Ksh25.9b) in the period while overheads rose by 17 per cent to Shs795.7b (Ksh24.5b).
KQ also provided for a Shs176.7b (Ksh5.7b) loss from fuel cost hedging, which it says was unrealised in the period but could become due in the near future.
"We have had turbulent times and this loss is obviously significant," said Mbuvi Ngunze, the airline's chief executive at a press briefing in Nairobi, Kenya yesterday.
"It is, however, important to know that we have made significant investments at a time when the industry generally was going through hard times," he added.
The airline has had a turbulent three years where at times it has been forced to borrow to pay staff.
Mr Ngunze said KQ is set to draw down Shs620b (Ksh20b) from Afrexim Bank to finance its working capital as it embarks on a long term strategy to return to profitability.
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Source:
Daily Monitor
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