Kenya Airways is one of Africa’s largest airline with an extensive domestic and international network which spans across the African continent, Europe, Asia-Pacific, America and the Middle East. The airline is reportedly narrowing its losses that was occasioned by the COVID-19 pandemic as it expects to see a 20 percent increase in revenue in 2022, according to its CEO Allan Kilavuka.
The carrier in which the government has a 48.9 percent stake saw revenue go down by half at the height of the pandemic in 2020, a time when airlines around the globe were forced to ground their airplanes. “We have been through the worst patch,” Kilavuka noted.
While forward bookings for the peak summer travel season are promising, the airline is hoping an election in Kenya scheduled for August 9 will not cause disruption. Two out of the last three elections in Kenya saw significant violence, hurting the travel industry and the wider economy. This year’s Kenya Airways growth forecast is dependent on no further travel disruption or restrictions caused by any new coronavirus variants, the CEO said.
According to the CEO, the continent’s airline industry is lagging that of Europe, Asia, and the United States. Nevertheless, cargo which accounts for some 10 percent of revenue at Kenya Airways, performed well during the pandemic, with the conversion of two passenger jets to cargo planes to carry goods.
He also noted that Kenya still suffers from a 40 percent deficit in required cargo capacity, with European operators who previously served the country opting for more lucrative routes between China and the West.
Aviation consultant Seabury was hired last month to advise on returning to profitability and its report is expected in the next three weeks, Kilavuka said. “We are looking for a more efficient airline. The network should not lose money.”
The government also seeks to take over $750 million of Kenya Airways debt, which it had guaranteed in 2017, as part of the restructuring effort, Kilavuka said. However, it will still be dependent on direct government support in its fiscal year ending June 2022 and the following year, as Kenyan Finance Minister Ukur Yatani noted in December, underscoring the need for cost-cutting measures.
Kilavuka said efforts to turn around the airline would involve a critical look at staffing and the renegotiation of contracts with suppliers and plane leasing firms. During the lockdown, the airline converted some of its Boeing 787 aircraft into freighters. However, they did not remove seats to accommodate more freight. The move could only see the carrier ferry close to 50 percent of goods.
