KENYA Airways has
posted the largest loss
in its history, with a
pre-tax shortfall of KES29,7bn
(R3,7bn) for the financial year
ending March 2015. Last year,
the airline posted a pre-tax
loss of KES4,8bn (R605m).
In a TV interview with
NTV Kenya, Mbuvi Ngunze,
Kenya Airways’ ceo, said the
airline was looking to obtain
a bridging loan from the
African Export-Import Bank,
Afreximbank. He attributed
the unprecedented loss to
competition from Middle
Eastern carriers, the volatility
of the exchange rate and
delays encountered with the
fleet renewal.
Meanwhile, the Kenyan
Senate has appointed a
committee to look into the
crisis facing the airline. Prof.
P. Anyang’ Nyong’o, chairman
of the committee, said the
airline’s losses could be
attributed to the following
problems.
Poor investment decisions
by management with regard
to buying and leasing aircraft
and fuel hedging have led
to “sky rocketing” debts,
he said. He added that
the airline’s fares were too
expensive and not competitive
in the market, which had led
to a loss of passengers and
revenue.
The airline’s routing
arrangements and
partnerships had amounted to
“massive” losses of revenue,
Nyong’o said. Furthermore, a
problematic human resources
policy had caused industrial
unrest.
The last problem he
highlighted was the
unreliability of the airline’s
services with frequent
cancellations of flights. This
had led to a poor relationship
with passengers, who were
consequently abandoning
using the airline, he said.
