Government commits to revive KQ by injecting cashJanuary 13, 2020
NAIROBI, Kenya, Jan 13-The government has committed to inject more cash into Kenya Airways that will assist in making the loss-making airline move its operations back to profitability.
Acting Cabinet Secretary for National Treasury, Ukur Yatani, says the treasury department is currently mobilizing resources to restore the company.
“Our National Carrier has had its own share of administrative challenges, management challenges, and the government has a revival plan and as Treasury, we are looking for funds,” said Yatani.
The airline recently appointed Allan Kilavuka as the Acting CEO following Sebastian Mikosz’s resignation.
“You are aware that Cabinet has passed the policy on Nationalization and we are working on procedural issues because we cannot afford to lose KQ in any way,” he added.
While presenting KQ’s half-year results, the board Chairman Michael Joseph said that the new plans were meant to boost the airline’s performance.
“In turning around Kenya Airways, a deliberate decision was taken not to shrink the airline but instead improve its financial performance through strategic investments on growth opportunities,” said Joseph.
The loss-making airline, which is 48.9 percent government-owned and 7.8 percent held by Air France-KLM, was privatized 23 years ago but sunk into debt and losses in 2014.
In 2019, KQ’s half-year results fell to Sh8.56 billion attributing its losses to increased operating costs in the wake of expanding to new routes and the return of two Boeing 787 planes that had been subleased to Oman Air.
Investments on the new routes such as New York, Mauritius, Libreville, and Mogadishu delivered a 6.6 percent increase in passenger numbers during the six months to Sh2.4 billion.
The company had its losses stretched from Sh3.9 billion recorded in the same period in 2018 despite the airline’s total revenue increasing to Sh58.5 billion, a 12 percent rise from Sh52.19 billion registered in 2018 during the review period.