National carrier Kenya Airways (KQ) has recorded a Sh9.89 billion net loss for the period ended June 30, 2022.
The airline reported 14 per cent drop to Sh9.9 billion from Sh11.5 billion in the same period last year; the airline has been making losses in the first six months of the year
KQ attributes this year’s loss to high fuel prices, increased operating costs and weakening of the shilling against the US dollar.
The high fuel cost saw the airline spend Sh11 billion during the period under review which pushed the total operational costs to a five year high of Sh57 billion compared to Sh56 billion in 2017.
During a press briefing, KQ Board chairperson Michael Joseph said that the volatility of the oil market made it difficult for the airline to maintain predictable spending on fuel.
“Jet fuel and crude oil prices rose markedly in Quarter One of 2022, putting pressure on already-strained airline finances. The elevated jet fuel price adds to the airline’s operating cost,” he said.
In efforts to bounce back to profitability, Joseph said KQ is committed to restructuring its operations especially at a time when operations have been positively impacted by spent-up demand and the removal of travel restrictions.
During this period, KQ uplifted a total of 1.61 million passengers during the period which is an 85% improvement compared to the prior year’s 0.87 million passengers.
The airline last made a profit in 2012 when it closed with net earnings at Sh1.66 billion. Since then it has accumulated huge losses forcing the state to come in aid with state bailout packages to help in keeping it afloat. The latest package was Sh20 billion in the supplementary budget before the National Assembly.
In July, the Ministry of Transport said there has been a move in the right direction in terms of KQ meeting the targets and that it is a matter of time before they revert to profitability.