Once famed for its “Pride of Africa” slogan, Kenya Airways is struggling to fly out of a turbulence of losses. Also popularly known as KQ, the airline is smarting from its latest setback, as it has just plunged into a Sh16 billion half-year net loss, up from Sh12.2 billion during the same period last year.
The airline’s costs surged by 12 per cent in the six months to a record Sh97.7 billion from Sh86.7 billion. This was largely due to higher fuel costs, which increased by 66 per cent to Sh29 billion, accounting for 32 per cent of its operating expenses.
According to the International Air Transport Association, jet fuel prices in Africa have risen to the second-highest globally due to the ongoing Middle East crisis.
The conflict has pushed operating costs to a record Sh97.7 billion, eroding passenger revenue.
Kenya Airways is, indeed, facing a paradox. Passengers are willing to fly, with some of its long-haul routes filling up beyond 90 per cent and revenue rising.
However, its half-year results for the period ended June 30 show how fleet shortages and supply chain disruptions have become a major constraint on its recovery. While passenger demand remained high, particularly on the Europe and US routes, the shortage of aircraft was a major impediment.
The problem has been compounded by a wider crisis in the global aviation industry, with airlines struggling with delayed aircraft deliveries, shortages of engines and spare parts, and maintenance delays.
The airline has in recent years become synonymous with government cash bailouts that are a huge burden on the taxpayer. However, despite the financial blow, its total revenue rose to Sh81.2 billion, supported by stronger cargo and passenger demand. Efforts to turn around the struggling national airline, including cutting costs to make it more competitive, should be stepped up. It should not remain a money pit through government bailouts.