With many countries beginning to ease their travel restrictions, airlines are eyeing 2022 as a year for recovery. Kenya Airways is once such carrier, with the Nairobi-based operator projecting a notable rise in passenger revenues this year. The airline is hoping for a busy summer despite the uncertainty of an upcoming election.
Revenues up by a fifth
Speaking to Reuters, Kenya Airways’ Chief Executive Officer, Allan Kilavuka, explained that the airline’s worst days in the coronavirus pandemic are likely behind it. He stated that “we have been through the worst patch,” with this likely referring to the early months of the crisis. Indeed, Reuters notes that, during 2020, revenues at the Kenyan flag carrier halved. Since then, it has been on the comeback trail.
While 2020 was the most challenging year for Kenya Airways during the present pandemic, it still faced challenges in 2021. Despite a 21% growth in passenger revenue last year, which narrowed its losses by a fifth, the national airline also lost 11.5 billion Kenyan Shillings ($101 million) in the first six months of 2021.
Moving into 2022, Kilavuka foresees calmer skies for Africa’s only SkyTeam alliance member. He explained to Reuters that he expects passenger revenues to rise by a further 20% this year. This will help establish a consistent recovery path away from the chaos of 2020. However, the projection is dependent on certain factors.
Relying on a consistent market
One of the primary areas of financial concern for airlines amid the present crisis has been the difficulty in adapting to ever-changing travel restrictions. With these regulations liable to sudden changes, it can be hard for airlines to make economic plans with much certainty. Equally, it can take time to respond to positive changes.
With this in mind, Reuters notes that a consistent market will play a key role in enabling Kenya Airways‘ positive revenue projections. Indeed, its CEO told the agency that the forecast “is dependent on no further travel disruption or restrictions caused by any new coronavirus variants.” This, of course, remains to be seen.
For the country of Kenya itself, there is also the small matter of a general election to contend with this year, on August 9th. Kilavuka hopes that the election will be a peaceful occasion, given that the peak summer season has seen ‘promising’ booking levels. However, violence has marred two of the country’s last three elections.
Aiming to return to profitability
As it looks to recover from the impacts of the early months and year of the ongoing coronavirus pandemic, Kenya Airways’ longer-term aspirations include a return to profitability. With this in mind, it has commissioned a report from Seabury, a consulting group. Kilavuka explains that, ultimately:
“We are looking for a more efficient airline. The network should not lose money.”
This may lead to cuts in certain areas, with the CEO telling Reuters that the carrier will take “a critical look at staffing and the renegotiation of contracts with suppliers and plane leasing firms.” It will be interesting to see what comes of these efforts, and how successful Kenya Airways profitability plans will prove to be.
Source: Simple Flying
