Kenya Airways losses deepen on weaker shilling
Source: AFP
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Kenya's struggling national carrier Kenya Airways on Tuesday reported a surge in losses in the first half of the financial year due to increased foreign exchange and borrowing costs.
The airline, which is part owned by Air France-KLM, is labouring under a mountain of debt and has been running losses for years despite numerous government bailouts.
Pre-tax losses for the period ended June 30 more than doubled to 22 billion shillings ($151 million) from 9.9 billion shillings a year earlier, the airline said.
This was despite a marked improvement in revenues that was gobbled up legacy debt and a weaker shilling which has lost more than 14 percent of its value since January.
"The devaluation of the Kenyan shilling has a significant negative impact on our financials as a majority of our transactions are carried out in the major foreign currencies," said the airline's chief executive Allan Kilavuka.
He said the shilling -- trading at a historic low of 145 to the dollar -- had increased overhead costs by 22 percent.
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Total revenue increased 56 percent due to an increase in passenger numbers to 2.3 million from 1.6 million in the first half of last year, the carrier said.
"Our focus looking ahead is on recapitalising the business to place Kenya Airways on a stronger footing and provide a stable base for long-term growth," said Kilavuka.
"We will continue focusing on our network expansion and fleet optimisation to increase passenger and cargo capacities," he said, expressing optimism in the forward bookings for the second half of the year.
Kenya Airways, whose slogan is "The Pride of Africa", last posted a profit in 2012.
Trading in the airline's shares remain suspended as it battles to return to profitability.
The shares were first suspended in 2020 as lawmakers considered a plan -- since dropped -- for the state to take full ownership of the carrier.
The government owns a 48.9 percent stake in Kenya Airways, while Air France-KLM has 7.8 percent.
It was founded in 1977 following the demise of East African Airways and now flies to 42 destinations, 35 of them in Africa.
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Source: AFP
