National carrier Kenya Airways has announced a Ksh. 7.6 billion net loss for the period ending December 31,2018.
The booked loss is however an improvement from the Ksh.6.1 billion loss posted in 9 months between March and December in 2017 which stretches to Ksh.9.4 billion when adjusted to a full year result.
In spite of the improved balance sheet, KQ posted an operating loss of Ksh. 683 million from a profit of Ksh.518 million shillings as new route investments and rising fuel costs ate into earnings.
This represented in an increase in operating costs which soared to Ksh. 114.9 billion from Ksh. 106.2 billion in 2017
Fuel costings which represent over 40 percent of operating revenues for instance rose by an average of 30 percent during the year while the carrier invested in a number of new destinations including direct flights to New York in late October.
The performance by the struggling airline is reflective of ongoing loss consolidation by the carrier having further cut its losses in 2017 from highs of Ksh.26.2 billion and Ksh. 25.7 billion in 2016 and 2015 respectively.
“What we needed to do in 2018 was to consolidate and hence it was a good year for us. I forsee going forward that 2019 will be a challenging year for us but we are excited of what the year could be, noted Kenya Airways Chairman Michael Joseph.
KQ’s revenue increased to Ksh.114.2 billion from Ksh.80.8 billion even as fleet costs rose to Ksh. 18.9 billion during the year.
To further revenue expansion in 2019 the national carrier has committed to the opening up of new routes while expanding frequency to exist routes this in effect to boost connectivity to its network.
Kenya Airways sister airline Jambo Jet will for instance see an expansion to its fleet even as it eyes new regional routes include Burundi’s capital-Bujumbura.
The airliner however is cognizant of challenges to capacity expansion with Chief Executive Officer Sebastian Mikosz underscoring the need for risk mitigation.
“Their is a trauma from previous miscalculations in expansion. We now have to balance risks in between expansion or the lack of it,” he said.
KQ increased its routes by 3 in 2018 while increasing on its weekly flights to continental destinations including Nigeria, Entebbe, Congo Brazaville, the Democratic Republic of Congo, Mombasa and Cape Town.
Further to growth in expansion, the carrier continues to pursue investments in digital distribution and productivity improvement to further business operations efficiency
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