Kenya Airways (KQ) said on Wednesday that recovering global air travel helped the airline further narrow its losses in the second quarter of this year, despite high fuel costs.
Kenya airways reported a Kes 9.88 billion half-year loss, which was less than the Sh11.48 billion loss reported in the same period last year.
The company’s revenue increased by more than three quarters to Kes 48.10 billion, owing to higher booking revenues.
However, operating costs increased by half to Kes53.11 billion as a result of a sharp rise in global fuel prices, according to the airline.
“The opening of borders around the world has led to quick rebounds in some key markets, we continue to focus on the restructuring process that started at the end of last year. Through this…we aim at structurally reducing our overall costs of operation and optimizing our network.” said KQ chairman Michael Joseph.
Kenya Airways Long History of Losses.
The airline last turned a profit in 2012, when it earned Kes1.66 billion in net earnings. Due to the massive accumulated losses, KQ has fallen into negative equity, indicating that it is technically insolvent.
KQ’s negative equity increased from Kes64.2 billion the previous year to Kes 83.4 billion at the end of 2021.
The airline has largely benefited from several State bailout packages, the most recent of which was Kes 20 billion in the supplementary budget before the National Assembly.
The Ministry of Transport stated in July that the Kes 36 billion bailouts for Kenya Airways in the current fiscal year is conditional and will be released only after the airline meets certain targets.
The ministry stated that KQ has made progress toward meeting targets and that it is only a matter of time before they return to profitability.