KQ Projects Sh50bn Revenue Loss As Aviation Industry Reels From Shutdown

July 3, 2020 / Comments (0)

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KQ Chief Executive Officer Allan Kilavuka told journalists the airline is ready to resume flights by July in order to mitigate further losses associated with the global pandemic.

“Our estimates is that since January to date, we have probably lost around USD 100 million (Sh10 billion), when we estimate to the end of the year we will loose USD 400 million to 500 million (Sh40-50 billion),” Kilavuka said.

KQ posted a net loss of Sh12.98 billion for the year which ended December 2019, compared to the Sh7.558 billion loss posted a year earlier.

While affirming the airline’s readiness to resume flying, KQ’s Chairperson Michael Joseph pleaded with the government to open the skies in order to facilitate resumption of flights which will revive revenues generated from the airline-related businesses.

The Airline’s CEO affirmed that resumption of flights will reduce the financial burden felt by the tourism and hospitality sector, allow tourists to the country and secure jobs for many Kenyans.

“Our plea is that can we start flying as soon as possible, even if it is at reduced level, any commercial flights will help us a lot, so can we start earning revenue, bring  tourists to Kenya, bring business meetings, hotels will open, create more job and get more people to work,” he said.

“There is a limit to how much business can be conducted virtually,” the KQ Chairperson asserted.

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The government banned all international flights in March with the exception of cargo flights whose crew are limited to a maximum of three.

The situation was further compounded by ban on domestic flights which took effect when the government-imposed cessation of movement which is now in effect in Nairobi Metropolitan Area, Mombasa and Mandera counties.

KQ’s CEO further noted that the firm has suspended its expansion drive and will not launch new routes for the next two years due to financial inadequacies.

Upon resumption of flight operations, Kilavuka noted that national carrier will insist of wearing of mask by passengers, ruling out the possibility of adjusting sitting capacity in its aircraft to facilitate social distancing saying the reconfiguration may not be economically viable.

“We will not do social distancing because there is little scientific proof that there is extra risk of transmission. Reducing seats will be uneconomical and tickets will rise by 60 per cent,” he said while responding to a series of questions from journalists.

As of July 26, Kenya had reported 132 virus-related deaths. Documented infections since March 14 totaled 5,384 people with 1,857 patients having recovered since April 1.

Source: https://www.capitalfm.co.ke/news/2020/06/kq-projects-sh50bn-revenue-loss-as-aviation-industry-reels-from-shutdown/

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