As Kenya Airways Continues To Sink In Losses, Uganda Airlines Is Making A Comeback 20 Years After Vanishing

By  |  August 28, 2019

Kenya Airways is not new to losses, the company continues to sink in losses year on year despite its tremendous efforts to revive profitability, the firm is implementing a turnaround strategy after five years of successive loss coupled with various operational challenges.

In the recent announcement of the half-year results, the airline’s loss before tax sunk deeper as it more than doubled to reach Sh85.6 million, the losses stretched from Sh3.9 billion recorded in the same period last year.

The company has increased investments in new routes such as New York, Mauritius, Libreville and Mogadishu and more frequent local flights to areas like Mombasa, Zanzibar, and Kilimanjaro.

Chief Financial Officer Hellen Mathuka said that the launch of new routes and flights pushed the first-half revenue by 2.2 percent from Sh52.2 billion same period in 2018 to 58.55 billion shillings.

The company’s total operating costs went up 15.6% to close at Sh61.5 billion up from Sh53.2 billion reported a year earlier.

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“We bare large costs on expansion. We have to keep the load factor as high as possible even as we take a loss in early stages, we invested in a lot of money on the new routes especially on operational costs since we are still working towards raising our profits from this,” Chief Executive Officer Sebastian Mikosz said.

The widened loss comes at a time when the firm is mulling over the replacement of its CEO Sebastian Mikosz who announced his early exit in May this year on “personal grounds”.He is expected to leave office on December 31, five months before the expiry of his contract

The firm is also awaiting to be nationalized after MPs approved the nationalization bid, it will take almost 21 months for the government to take back full control of Kenya Airways by buying out 80,000 shareholders who bought the airline’s stock at the NSE including Air France-KLM’s 7.8% stake.

While Kenya continues to struggle with its Airline, Uganda has relaunched its national airline with a trip to Kenya for the first time in twenty years.

The inaugural flight on Bombardier CRJ900 to Jomo Kenyatta International Airport lasted about 45 minutes with eight passengers on board.

The tickets were priced at a fee of USD 277 (about UShs 1,022,337), the airline could have earned UShs 8,178,696 on its first commercial flight.

Featured Image Courtesy : Nairobi news

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