VIDEO:Losses widen at KQ as revenue growth stalls
National carrier Kenya Airways (KQ) has extended its poor performance for the third year in a row.
On Thursday, the airline announced it made an after-tax loss of Sh11.9 billion for the six months ending September, compared with a net loss of Sh10.4 billion last year.
At a much-awaited investor briefing held in Nairobi, KQ executives remained bold in the face of the successive loss streak.
They insisted that a turnaround strategy involving a long-term capital-raising plan and an operational restructuring currently under way would bear fruit in the long run.
They blamed forex losses, flat revenues, reduced capacity, as well as an unabating competition from Middle East carriers for eating into the airline’s revenue margins.
“Rome was not built in a day and we are doing our very best under these circumstances to ensure things change for the better,” KQ CEO Mbuvi Ngunze told journalists.
KQ Finance Director Alex Mbugua said the airline’s total operating costs declined to Sh58.9 billion this year from Sh67.2 billion posted in the half-year period in 2014, in what he attributed to cost containment.
“Lower fuel costs helped us narrow losses significantly,” said Mr Mbugua.
Mr Ngunze said an elaborate turnaround plan, backed by its key shareholders, including KLM and the government, would help boost the airline’s fortunes.
The airline has hired consultants McKinsey and Seabury to chart a turnaround strategy.
During the 2014-2015 financial year, KQ posted a record pre-tax loss of Sh29.7 billion, compared with Sh4.8 billion during the 2013-2014 financial year, prompting queries about its sustainability.