Due to rising foreign exchange and borrowing expenses, Kenya’s ailing national airline Kenya Airways on Tuesday announced a sharp increase in losses in the first half of the fiscal year.
Despite multiple government bailouts, the airline, which is partially owned by Air France-KLM, is struggling under a mound of debt and has been losing money for years.
Pre-tax losses rose from 9.9 billion shillings a year earlier to 22 billion shillings ($151 million) for the year ending June 30.
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“Recapitalizing the company”
Despite a significant increase in earnings, inherited debt and a depreciating shilling—which has lost more than 14% of its value since January—consumed the surplus.
“The devaluation of the Kenyan shilling has a significant negative impact on our financials as a majority of our transactions are carried out in the major foreign currencies,” stated the airline’s CEO Allan Kilavuka.
He said that the shilling’s historic low of 145 to the dollar had driven up overhead costs by 22%.
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According to the airline, an increase in passenger volume to 2.3 million from 1.6 million in the first half of last year caused a 56 percent gain in total income.
Our future priorities center on recapitalizing the company to give Kenya Airways a stronger foundation and a solid foundation for sustainable growth, according to Kilavuka.
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In order to enhance passenger and cargo capacities, “We will continue focusing on our network expansion and fleet optimization,” he said, sounding upbeat about the forward bookings for the second half of the year.
called “The Pride of Africa”
The last profitable year for Kenya Airways, whose tagline is “The Pride of Africa,” was 2012.
As the airline struggles to earn a profit again, trading in its shares is still halted.
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The shares were first put on hold in 2020 as legislators debated a proposal—since abandoned—for the state to acquire full ownership of the carrier.
Kenya Airways is 48.9 percent owned by the government and 7.8 percent by Air France-KLM.
Agence France Presse
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