Kenya Airways has reported a net loss of 7.5 billion in profits as the company announced its 2018 financial year performance.
Speaking from Kenya’s Capital Nairobi, Kenya Airways group chairman Michael Joseph admitted 2018 had been a challenging year for the airline.
He, however, cited an increase in passenger number something that he attributes to the management and massive support from the board.
Michael Joseph also added that Kenya Airways is not only an airline but also a strategic asset that the country should be proud of.
The airline will not only increase the country’s GDP but also create employment despite the challenges it’s currently facing.
Kenya aviation losing position
Kenya Airways GMD and CEO Sebastian Mikosz noted that traffic to and from JKIA is the smallest in the continent at 7.2 million.
“Traffic to and from JKIA is the smallest at 7.2 million across the continent. Regional carrier’s network coverage in Africa is broader and our role is to defend our hub and grow it.” GMD & CEO Sebastian Mikosz.” Said KQ CEO
Kenya Airways challenges and mitigation
The national carrier admitted fuel as the there biggest challenge for a while now as fuel prices soar up to 30% representing 40% of their direct operating cost.
To mitigate the above risks, KQ has implemented a hedging policy with minimal risks. Other challenges they are facing include;
- Supplier monopoly
- High taxes
- High competition
- HR shortage
- Repatriation of funds
Mitigation plans to curb the challenges listed above include;
- Sourcing of suppliers
- Lobbying for tax reduction
- Introduction of project Simba
- Introduction of Engineers and pilots training
- Lobbying for more funds.
Kenya Airways achievements
Kenya Airways has seen a growth in daily passenger’s numbers, cargo, cabin factor that achieved an average time performance of 79%.
In 2017 the airline recorded a daily passenger’s number of 12,484 and in 2018 it recorded a higher number of daily passengers of 13,258.
The airline trips increased from 64,602 in 2017 to 65,684 in 2018, daily cargo uplift increased from 174 in 2017 to 176 in 2018, cabin factor went up from 74% in 2017 to 76 percent in 2018 with an on-time performance recorded as 79% in 2018.
Kenya Airways investment
In terms of investment, the airline opened direct flights to New York City. They admit it to be challenging but it has enabled them to position the airline and Kenya differently.
“New York is symbolic. This route is challenging, but it allows us to position KQ and Kenya differently. We are flying 5 weekly frequencies, we adjusted this to cater to the seasonality of the route. From Jun to Aug, we will fly daily.” GMD & CEO Sebastian Mikosz