KQ pays the price for heavy reliance on passenger revenue

The Covid-19 pandemic has exposed the weak points of global airlines, which are now struggling to stay afloat. Airlines such as Kenya airways, which were already in financial mess, have seen their situations worsen as the virus scourge continues to wreak havoc to key sectors of local and global economy.

KQ has now realised that its overreliance on passenger services is its undoing. The national carrier has thus been compelled to think harder to broaden its revenue streams in a bid to cushion itself against such global crises as the current Coronavirus.

The airline is already planning to diversify 40 percent of its business to other revenue streams and cut overreliance on passenger services, which forms the bulk of its revenue.

At the moment, 90 percent of the Kenya Airways revenue comes from passenger services with a paltry 10 percent from cargo.

KQ chief executive officer Allan Kilavuka says the carrier has been heavily reliant on passengers but it’s now time they diversified their business, having learned from the Coronavirus havoc.

“We have been heavily reliant on passengers but we now need to spread out our business. We are working on how to diversify to other revenue streams,” said Mr Kilavuka.

Source: https://www.nation.co.ke/business/KQ-pays-the-price-for-heavy-reliance-on-passenger-revenue/996-5544142-10hj5xyz/index.html

 

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