Kenya Airways cuts losses by half to 10.2Bn as turnaround strategy takes off
KQ Chief Executive Mbuvi Ngunze says the turnaround strategy the airline has been implementing in the last one and a half years has started to bear fruit resulting in better performance.
Passenger numbers went up by 5.4 percent, to 4.5 million customers the highest the airline has ever had while cabin factor went up by 4 percent.
Turnover went down by 8.5 percent to Sh106 billion compared to Sh116 billion in 2016, while net finance cost went up by Sh4.1 percent to Sh7.3 billion from Sh7 billion.
The airline was also impaired by foreign exchange losses that hit Sh4 billion due to the devaluation of currencies in Sudan and Nigeria during the period under review, however, this was a 62 percent decline from Sh10 billion loss in 2016.
Fuel costs declined by 2.5 percent to Sh23 billion while operating costs went down by 3.7 percent to Sh41 billion.
Going forward the firm is focusing on financial restructuring and senior management improvements.
“We are working on increasing new staff at the senior management level to help with the turnaround. We are also planning to renegotiate our debt repayment with our finance partners so that we can pay our debt over a longer period,” said KQ Chairman Michael Joseph.
The airline is also planning to add 20 new frequencies in Africa.
The National Carrier earlier appointed a Polish National Sebastian Mikosz as the new Managing Director effective June 1, 2017 to replace Mbuvi Ngunze who was set to leave in the first quarter of 2017 following two years of loss making at the airline.
Last year Dennis Awori resigned as Chairman of the Board of Kenya Airways and as director of the company after the Kenya Airline Pilots Association (KALPA) pushed for a management makeover of the company.
KALPA had threatened to strike if both Awori and Ngunze did not resign but later called it off on October 17, 2016 after a deal with the management on leadership changes after a loss of close to Sh50 billion within two financial years.