Kenya Airways has reported a jaw-dropping Sh36.2 billion loss for the year ending December 2020. The national courier has been having losses for the past 8 years, with 2012 being the last year that the company made a profit.
The loss becomes the largest ever reported by a listed firm in Kenya, in comparison to a loss of Sh12.9 billion the airline reported in 2019.
However, with the COVID-19 travel restrictions imposed in almost all countries of the world due to the third wave, the courier service has been forced to halt its travel services. KQ makes more revenue from passenger travel and the financial year ended December 2020 shows that passenger numbers reduced by 65.7% to 1.8M Passengers. Therefore, the passenger revenue dropped by 67.5% to Ksh 33.7B ($307m). This loss is the worst registered yet by corporate Kenya.
The loss for the financial year of 2020 is 2.8x more than the loss posted in the financial year 2019 which was stated at Ksh 12.98b ($118m). Total income of the year 2020 went low by 58.9% to Ksh 52.8B ($481m) which clearly shows the impact of a steady fall on passenger numbers as many countries continue to restrict movement to curb the spread of the virus.
“Approximately 70% of the total passengers carried in 2020 were flown during the first 3 months of the year, demonstrating the drop in demand as the global crisis deepens,” said Michael Joseph, KQ chairman.
He also stated that the effects of the pandemic are expected to be felt by the airline for the next three or four years.
After the pandemic was first reported in Mid-March, all countries banned traveling to and from countries and this put the KQ courier service on a redundancy. They had to furlough almost 80% of their workers and let some go. This was done to reduce pressure on the bottom line. They sought money from the government for them to keep afloat.