Business
Kenya Airways posts $56 million half-year loss
The carrier’s management have said that the steep rise in the wage bill prompted the retrenchment that is expected to see save the company at least Sh1.24 billion (US$14.5 million) annually.
Low passenger numbers and yields have seen the airline suspend flights to loss-making routes including Rome and Muscat where competition has been rising and in Zanzibar where growth in passenger numbers has been flat.
Kenya Airways reduced capacity on European routes such as London, which account for about 30 percent of its revenues.
That action saw revenue passenger kilometre fall by 3 percent, resulting in a 9.6 percent drop in total revenue for the period to KSh 49.8 billion (US$583 million).
Mr Naikuni said passenger numbers between London and Mombasa have nearly halved and that the airline hopes to reverse that with the opening of alternative African routes to feed into the European flights.
Europe’s share of Kenya Airways’ passenger volumes dropped from 29 percent to 22 percent in the period under review, while Africa’s share grew from 48 percent to 52 percent.
Africa remains Kenya Airway’s mainstay and the airline is looking to capitalize on this with an increase of presence in some of the high-yielding routes. Traffic in the Middle East and Asia also grew with the introduction of flights to Delhi, India and the re-launch of Jeddah, Saudi Arabia, flights boosting the numbers.
Kenya Airways raised KSh14.5 billion (US$170 million) through a rights issue in the first six months of the year and plans to use the money to grow its fleet and expand the number of destinations from 59 to over 100.
Source: Business Daily Africa
