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Kenya Airways to Rationalize Flight Frequencies to Cut Cost

The national carrier, Kenya Airways(KQ) will be expected to trim its network and rationalize its flight frequencies as the government moves in to revive it from losses, Treasury CS Ukur Yatani said in his budget presentation.

The carrier was also tasked to operate a smaller fleet and rationalize its staff complement.

While presenting the 2022/23 budget, Ukur Yatani said the airline is facing severe cash-flow constraints following global lockdowns triggered by the Covid-19 pandemic

Kenya Airways plays a major and catalytic role in the economic development of the economy however it has been on a loss-making streak since 2013, reporting its last profit in 2012 when it closed with net earnings at Sh1.66 billion.

The losses have compounded the huge debts the airline took to buy a fleet of new Boeing planes, pushing it into negative equity territory. Currently, the airline’s assets are valued at Sh155.5 billion against a total liability (non-current and current liabilities) of Sh157.9 billion.

KQ now depends on the government for a bailout.

Last year, the National Treasury committed to bailing out the airline after shelving plans to nationalize it. The Kenyan government agreed to assume $827.4 million of KQ’s debt and provide financial support in FY2022 and FY2023.

“The Government as a major shareholder is supporting the restructuring of Kenya Airways to adapt to the challenges facing the aviation industry due to the adverse impact of Covid-19 pandemic,” Ukur Yatani.

In 2021, the national carrier narrowed its net loss by 56.58 per cent on higher revenue as travel picked up with the easing of Covid-19 restrictions.

The national carrier reported a net loss of Sh15.8 billion in the review period compared to a net loss of Sh36.2 billion the year before when travel restrictions hit operations hardest, including grounding its planes for months.


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