Kenya Airways (KQ) expects passenger flights to resume earliest in September but with a low capacity, five months after the airline stopped international flights due to the Covid-19 pandemic.
“There is a reasonable expectation that the flights could resume in the third quarter of the year with business expected to have started at very low capacity and a gradual ramp-up, influenced by the gradual lifting of travel bans, uncertain passenger confidence and health safety measures,” KQ says in its latest annual report.
Although the airline eyes this as the best-case scenario, it warns that the definite length of suspension of the passenger flight business is still uncertain.
The airline stopped international flights after a State order on March 22, a move that cut off the airline’s flow of new revenues at a time it had no cash reserves.
The airline says that discussions with key industry stakeholders are on in relation to a safe return to passenger routes. It is expected that the airline will be able to cover its variable costs on resumption.
“The resumption is expected to happen within the period of the moratoriums already being negotiated with lenders and lessors and thereby allowing the airline to grow back its revenue base and gradually cover its fixed costs,” says the airline.
Kenya Airways has been operating only cargo flights for essentials such as medicine but this has not been enough to sustain business given that it was already in a loss territory pre-coronavirus.
Chief Executive Officer Allan Kilavuka had unsuccessfully applied for a bailout from the National Treasury to help meet maintenance costs of grounded planes, pay salaries and settle utility bills like security, water and electricity.