Kenya Airways lost US$290 million (R5,2bn) in 2022. This was an increased loss on its 2021 loss of US$120,55 million (R2,2bn).
The group released its financial results for the year ending December 31, 2022 at an investor briefing on March 27.
Results were impacted by the devaluation of world currencies against the dollar, a fuel price increase and losses in forex due to the current financial restructuring.
The group's revenue in 2022 increased by 66% from the 2021/2022 year, to $890 million (R15,9bn). However, operating costs swallowed up the benefit, those costs having increased by 93% due to the rise in operational and fuel costs.
The revenue increase was attributed to the increase in travel demand as the world has opened up. Passengers increased by 68% during the period and passenger load factors were only 3,9% below the load factors achieved before the pandemic.
KQ Chairman Michael Joseph said operations had been impacted positively by pent-up travel demand, the removal of travel restrictions and KQ’s efforts to increase frequencies across its network. This had resulted in a strong and sustained recovery in performance compared with a similar period in the prior year.
Iata said a return to profitability was expected for global airlines in 2023. Kenya Airways projects sustainable recovery in 2024.
The airline is addressing legacy issues to turn itself around, among them debt restructure, reduction of operating costs, restructuring of leases (this has so far saved 22% in leasing costs), improvements in reliability and on-time departures and arrivals, a focus on guaranteeing an excellent passenger experience, enhancing the productivity of employees and diversification – in the coming five years, the airline plans to double cargo's contribution.
Kenya Airways continues to pursue its strategic partnership with SAA, undaunted by COMESA’s declaration that it will treat the deal as a merger due to its effects on competition. The two airlines still plan to partner by 2024. (The two African airlines have a plan to create a pan-African airline group by next year. It will have a combined fleet of more than 100 aircraft.)
Restructuring
Meanwhile, KQ says the Kenyan government will soon approve the airline’s restructuring plan.
The airline fell into insolvency in 2018 when its expansion left it in debt.
CEO, Allan Kilavuka, told Reuters that the restructuring plan would replace the previous plan introduced by the administration of former President Uhuru Kenyatta, and backed by the International Monetary Fund. Former President Uhuru Kenyatta's government had agreed to provide loans and eventually take over $800 million (R14,3bn) of the airline's debt. But the change in leadership saw the current President William Ruto, elected in September, introduce a new turnaround plan, and KQ’s funding was cut by US$80 million (R1,4bn).
Kilavuka said the new plan would include elements of the previous plan, such as eliminating loss-making routes.
Kenya’s Finance Minister Njuguna Ndung'u, told press the government wanted a turnaround of the airline so that it could secure a strategic investor.
