By Editorial
Once the pride of the country, the East African region and the continent, the national carrier, Kenya Airways, has for too long continued to fly into economic turbulence. Indeed, what was once a profitable venture that contributed to national development, the airline popularly known as KQ, has become a bottomless pit into which public funds are sunk year after year.
The sickening news of the appalling performance continues. The airline has just reported another loss of Sh21.7 billion for the six months ending June this year. This is a 120 per cent increase from the Sh9.9 billion incurred during a similar period last year. And explanations are still being reeled off.
The latest mediocre results have been blamed on foreign exchange costs resulting from a steep depreciation of the Kenya shilling. The most logical question is why the government continues to religiously pump money into a venture that shows no signs of climbing out of this woeful hole. Is it just about the pride of having a national carrier or what?
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A 56 per cent increase in revenues to rake in Sh75 billion within the half-year performance, as passenger numbers grew from 1.6 million in the first half of 2022 to 2.3 million, was wiped out by higher costs. These rose by 67 per cent to Sh96.8 billion, mainly due to finance and fuel costs.
CEO Allan Kilavuka is upbeat that the airline has for the first time in six years actually made an operating profit, which to him, confirms that it is a viable business. The last time KQ made a profit was in 2012, with net earnings of Sh1.6 billion.
The airline has no option but to tackle its huge debts amounting to $1 billion. It seems to have figured out some solutions, which include swapping debts for equity. This will entail selling some shares to a strategic investor. KQ is also considering beefing up its cargo operations from October. If it is not possible to turn around the business, then winding it up might be a logical option to save the resources going to waste.
