Kenya Airways loss triples due to pandemic
Kenya Airways airline posts loss tripled to $ 329.6 million for the year 2020, as its turnover fell by 59% due to the impact on travel of the Covid-19 pandemic .
Based at Nairobi-Jomo Kenyatta airport, the Kenyan national carrier has been in deficit for eight years; but the health crisis and “the worst year in the history of air transport” resulted in a record loss. The Group’s total revenue for the fiscal year ended December 31, 2020 was reduced by 59%, the result of the reduction in flight capacity “caused by the unprecedented global slowdown in commercial aviation” which saw its traffic return to the level of 1999, explains Kenya Airways in its press release. Recalling the shutdown of operations from April to August 2020 “following a directive from the Kenyan government to suspend all scheduled passenger services out of the country in an effort to curb the spread of the virus”.
The Group recorded a 39% decrease in total operating costs, mainly due to this suspension of operations. Direct operating costs fell 62%, while fixed costs fell 3.1%. “Based on revenue and cost dynamics,” Kenya Airways posted an operating margin of -51%, 50 points below that of the previous year.
According to the chairman of the board of directors of the SkyTeam alliance company, Michael Joseph, “although no one could have predicted the Covid-19 epidemic in 2020, its prevalence continues around the world, and the fact that Industry projects require to remain at levels below 2019, Kenya Airways underlines its commitment to an efficient network, improving the quality of service and delivery. We have taken bold steps to protect our employees and customers as we restructure our business to position it for the recovery ”.
The situation continues to be “difficult even as we are gradually resuming our activities, mainly due to the drop in demand for air travel,” adds the leader, who expects a return to 2019 levels in 3 or 4 years. “The magnitude of this challenge requires substantial changes so that we are in a competitive and resilient position to deal with the impact of COVID-19, withstand any long-term reduction in customer demand and any economic shock. or events that could affect the airline ”, underlines for his part Allan Kilavuka, Kenya Airways – Group Managing Director & CEO.
In the long term, Kenya Airways is mainly focusing on its nationalization, launched in July 2019: “This will give us the strength and the ability to compete on an equal footing with our peers, in particular carriers from the Middle East”, specifies Michael Joseph, for whom “all our biggest competitors have the same structure”.